Don’t assume casual laborers are contractors—and don’t neglect workers’ comp insurance — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Don’t assume casual laborers are contractors—and don’t neglect workers’ comp insurance

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in Compensation and Benefits,Employee Benefits Program,Hiring,Human Resources

If your business relies on hiring casual laborers and you routinely pay a set price for a day’s work, don’t assume your workers are independent contractors. If one of them falls or is injured, chances are a court will conclude he’s an employee due workers’ compensation benefits.

If you don’t carry workers’ comp insurance, you’ll be on the hook for big bucks.

Recent case: Fredin Contillano worked about two days per week as a tree trimmer for a tree service company. He received a flat daily fee and worked only when the company called him. The company didn’t carry workers’ compensation insurance because the owner said he couldn’t afford it.

Contillano fell out of a tree, spent a month in a coma and lost an eye. He applied for workers’ comp benefits.

The North Carolina Industrial Commission concluded that Contillano was an employee and was therefore due benefits. The company was ordered to pay Contillano $160 per week, plus all his medical benefits. In addition, the commission will decide how much the lost eye is worth, a cost the company will have to pay—on top of a $15,000 fine for not carrying insurance. (Contillano v. Wesley’s Services, No. 893688, North Carolina Industrial Commission, 2009)

Final note: Not sure who’s an independent contractor and who’s an employee? See “Independent contractor or employee? How to make the call.”

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