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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