I AM A PAPER CONTRACTOR. AM I RESPONSIBLE FOR WORKERS' COMP BENEFITS?

If an employee of a subcontractor is injured on your jobsite and that sub does not carry workers’ comp coverage, then you may be responsible for WC benefits.

If an independent contractor is injured on your jobsite and they do not carry workers’ comp coverage, then you may be responsible for WC benefits.

If you hire any casual or day labor and that laborer is injured on your jobsite, then you may be responsible for WC benefits.

While every case is unique, when I say “may be responsible,” almost always the correct verbiage is “will be responsible."

BRUTAL!

We know that a paper contractor is an individual or entity that manages construction projects, often without performing any physical labor or construction work themselves. Work typically involves administrative functions such as securing permits, logistics, meeting with the customer, budgeting, etc., all while subbing the actual work performed to specialized subcontractors who perform the actual labor. 

But one of the most overlooked administrative functions, and often one of the costliest, is verifying that all workers who step on to your jobsite either carry their own workers’ compensation coverage or work for a subcontractor that has secured their own workers‘ comp coverage. 

BREAKING NEWS: If they do not have their own coverage, or if they work for an entity that does not carry their own, then YOU are responsible.

EVEN MORE BRUTAL!

Here’s the rub, and the reasoning behind it: You are the Statutory Employer. 

A statutory employer is a person or entity that employs another (such as a contractor) to perform work in the course of a business and is liable for workers' compensation according to a statute establishing such an employment relationship or liability. This means that even if the worker is technically an independent contractor, the statutory employer is responsible for providing workers' compensation benefits if the worker is injured on the job. As the statutory employer for the job, almost everything flows up to you, especially when an injury occurs.

Call your agent. Call your workers’ compensation provider. Ask questions about your coverage. Ask questions about the labor you hire. Ask how to verify if your sub has their own coverage. 

The construction business can be tough. If you need support or have questions, LCI Workers’ Comp has been a trusted resource for more than 35 years.

This information is provided for information purposes only and should not be relied upon as legal advice. Please contact your attorney if you have specific questions regarding a specific item mentioned in this article.