In most cases, if your employee gets hurt on the job or happens to experience a work-related condition, then workers compensation will more than likely apply. Even if the industry is not highly physical, such photography or event planning, injuries can still occur in such sectors.
Understanding the workers compensation benefit, regardless of whether you plan on hiring independent contractors as a sole proprietor, is very important.
In most cases, when one of your workers gets injured, you will have to deal with the following aspects:
- Medical costs due to job-related injuries or sickness
- Facilitating the services required to assist them to recover and resume work
- Reimbursement for any lost wages
- Protection from employee lawsuits for medical expenses and lost wages
Freelance Workers Compensation Insurance
Workers comp is something that should be available to all freelance workers. However, in most cases, an employer is not legally obligated to take out such policies. Still, with the rise of the freelance economy, things are expected to change soon.
Usually, the health insurance coverage you take out for your company employees will not cover freelancers and their work-related injuries. If they need to take time off work due to an illness or injury, then the responsibility for replacing lost income will fall upon them.
The way things currently stand is that independent contractors are viewed as skilled individuals who work on their own, make and set their hours, and pay their own taxes. Therefore, they are not entitled to worker’s comp since they are assumed to have purchased their own policy.
If someone considers themselves a freelance worker, it does not mean that the government will automatically share the same opinion. The classification of employees is typically determined by elements such as how much control the employer has over your schedule and your level of independence.
Experts also state that the IRS and the Worker’s Compensation Commission view employees differently. But, in general, their definitions of such issues are based on the level of control the employer has over the worker.
If you plan to hire someone to work as a freelancer, such as hiring on a freelance blog writer, so that they can help you with a project, you could be held liable for any job or work-related injury they incur despite what the law says regarding this issue.
This usually happens when you fail to make the terms of their contract clear. This usually means asking them to provide you with proof of their insurance policies in the form of a COI (Certificate of Insurance) before signing the contract.
To clarify how worker’s compensation applies to freelance contractors and prevent any issues from arising down the road, it is essential that, as an employer, you have a written contract with your freelance employee that defines your working relationship before any work starts.
It should also clearly outline the roles of both parties involved. Failure to do so may result in the courts siding with your freelance worker when they file for worker’s compensation benefits.
This is more likely to be the case if it was not apparent whether the worker was an independent contractor or an employee. Clarifying such matters is also essential if you ever plan on convincing management to hire more staff to boost your team’s effectiveness.