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Sub-Contractor or Employee?

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Sub-Contractor or Employee? 

Submitted by Bernie Reinert

 Many small business owners in the construction trades often misclassify those that are employees as sub-contractors and do not realize the financial impact of such an error.  Do you have “sub-contractors” that work for you on a regular basis and perform their job duties under your supervision?  Do they use tools that you have provided or receive a regular salary from you?  Are you the only contractor they work for?  If your answer to these questions is yes, you may have an employee on your hands, not a sub-contractor.

 If you already carry Workers Compensation Insurance  for yourself or other employees and you fail to identify this sub-contractor as one of them, you may be in for an expensive surprise when your Workers Comp audit arrives in the mail.  But even worse than that surprise is the one you will get if you do not have Workers Comp in place and this sub-contractor is injured on the job.  As the employer, you will be held responsible for the medical bills, rehabilitation costs, lost wages (and more) associated with the injury, not to mention the fines and criminal prosecution you face for not having had Workers Compensation Insurance  in the first place.

If you aren’t sure whether you have a sub-contractor or an employee working for you, visit the State Worker’s Insurance Fund website by clicking on the link below or consult an attorney.  Then give us a call to discuss your Business Insurance needs.’_insurance_fund_(swif)/10436

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