Sometimes you don't have to hire anyone in order to become an employer. Providers of almost any type of service to your business who are ill, injured, or die in the course of providing those services may attempt to claim an employment relationship, for the purpose of collecting workers' compensation benefits.  It often seems the more tragic the injury or death, the more likely there is a spouse, child or other survivor who will claim it is employment-related.

Contracts purporting to establish an independent contractor status may make you feel secure, but rarely hold up on their own.  Outcomes vary widely from state to state, but typically involve the application of various tests for "inferring" employment. These tests, some of which correspond to I.R.S. criteria, may consider:

  • Whether you control the manner & means of accomplishing the service.
  • Whether you have the right to terminate the relationship at will.
  • Whether the service is a distinct occupation or business.
  • Whether the service is done with or without supervision.
  • Specialized skills required in the particular service.
  • Whether the provider utilizes his/her own tools &/or supplies.
  • Length of time services are to be provided.
  • Method of payment
  • Whether the services are of a type regularly carried on in your business
  • Intent of the parties
  • Any of dozens of other criteria

Fortunately, if you maintain valid Workers' Comp-Employer's Liability insurance, your policy will generally respond to anyone claiming employment-related injury. This also means, however, that premium auditors may elect to charge you premiums on people you never considered employees.


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