Employers are often tempted to cut corners in lowering Workers Compensation costs. We’re here to tell you that these shortcuts only lead to legal headaches.
For example, when an employer decides to declare certain employees independent contractors, and thus exempt from Workers Comp requirements, the usual process is to terminate the employees, have them purchase their own insurance, and bring them back onto the job as independent contractors.
However, such arrangements eliminate one of the key advantages of Workers Compensation laws for an employer: The limitation on the right of an injured worker to sue the business. In other words, if the injured person is an independent contractor, they’ll receive no Workers Comp benefits – which means there’s no limit on their ability to sue your company for whatever damages the court might award! Even if you win the case, defending it will cost you time, money, and grief.
When you, as an employer, choose to use an independent contractor instead of an employee in the workplace, be aware that you’re trading immediate and limited savings on your Workers Comp premium for exposure to unlimited legal damages and other hassles.
Think about it, and give us a call whenever it’s convenient to discuss your options.