Workers Comp - Sub Contract Question

Russ Spence

Commercial Pressure Wash Expert
I carry workers comp, if I hire a sub that does not, my insurance carrier now says I am responsible to with hold their percentage from the sub or I will be responsible for paying it at my yearly audit.

So if I hire a sub with workers comp its a no-brainer but if I hire a one man show that by law does not have to carry it in my state am I still responsible for his $$$$ or is there a loophole so he can get around it as well as me.
 
Good question. I think your carrier is going to answer that question by claiming you are responsible. I just went through hell with L*berty Mutual because I didn't provide proof of coverage for L*bor Max temp laborers the first time around.
 
Workers Comp premiums are payroll based. If you hire anyone, you pay their premium - it's a percentage based on what category their job description puts them in, ie, a roofer will have a higher premium than an office worker. If the sub you get does NOT have their own, you will either have to withhold it from their pay or get whacked yourself at audit time. That's one reason that a lot of companies, when they hire you want YOUR proof, because if YOU don't have it, they have to pay your portion just like you do when hiring an uncovered sub.
 
Why doesn't this "one man show" get workers comp to cover himself classified as janitorial work (cheap) for his business, then exempt himself? Then he would be following the law AND have the ability to provide you with the certificate you need. It would probably run between $400-$600/yr.
 
Good question. I think your carrier is going to answer that question by claiming you are responsible. I just went through hell with L*berty Mutual because I didn't provide proof of coverage for L*bor Max temp laborers the first time around.

One of the advantages of using a temp agency is that they provide workmens comp for their people. I would point out that it is illegal to obtain double coverage.
 
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