Do you use subcontractors? Get solid advice on liability potential

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in Employee Benefits Program,Human Resources

If your company uses subcontractors, you could end up liable for any injuries the subcontractors’ employees suffer while working for you. Or they could just collect workers’ comp. Which scenario will apply to you?

A lot depends on whether or not your organization is the “statutory employer.” That in turn depends largely on how much control you have over the subcontractor’s work.

That’s why it pays to get solid advice from your attorney and your insurance agent on how to structure and run subcontractor contracts. If your company ends up outside the statutory contractor status, it may be liable for negligence on top of any workers’ compensation claims the injured subcontractor employees file.

Recent case: Joel Ledbetter and a co-worker received severe burns while doing electrical work at a Wal-Mart. A subcontractor for Eaton Electrical, which Wal-Mart had hired to perform the work, employed them. Both employees collected workers’ compensation benefits from the subcontractor, but they also sued Eaton, claiming negligent training and supervision. In effect, they tried to collect more money from a second source.

Now a court has ruled that Eaton will get a chance to prove that it didn’t exert enough control over the electricians’ work to be liable for negligence. (Ledbetter, et al., v. Wal-Mart, et al., No. 06-CV-01958, DC CO, 2008)

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