Owning and running a business isn’t easy by any stretch of the imagination. Not only do you have to deal with things like stiff competition, you also have to insure that your company is following the law. One thing you must certainly know about is workers’ compensation. Below are a few details regarding workers’ comp that every business needs to know.
Facing a Claim
Many business owners may assume that the likelihood of facing a workers’ compensation claim is remote. Their businesses may seem to be in relatively safe industries with low injury rates. However, according to the Bureau of Labor Statistics, nearly 3 million work related injuries and illnesses were reported in 2014 in nearly every kind of industry conceivable. Chances are you will have to deal with a workers’ compensation claim at some point.
The laws for workers’ compensation vary by state. However, for a good deal of states, a company only needs to have a single employee for the law to demand them to pay workers’ compensation for work related injuries. Other states may require that any business with five or more employees must provide workers’ compensation. Rules may also vary by industry. For example, construction companies, which tend to be more workplace injury prone, may be required to provide workers’ compensation no matter the number of employees. These rules may not be the same for a restaurant however.
Some businesses simply assume that by having their employees sign 1099 forms they will be protected from the threat of having to pay workers’ compensation claims in the future. Professionals, like those at Bachus & Schanker Law, know how important such forms are. However, unless those employees actually qualify as independent contractors, you could be committing fraud. Trying to avoid paying workers’ comp by misrepresenting an employee’s status could result in high fines being levied or even criminal prosecution by the federal government. Unless the people you pay do qualify as freelancers, you should certainly carry workers’ compensation insurance.
Workers’ Compensation and Employee Duties
In many states, workers comp must be provided for any injury that occurred within the scope of an employee’s duties. For example, a salesperson that is injured while traveling to make sales may be covered under the law. It is not required that he or she had been injured in the office.
You may do your best to insure that your business does provide a very safe work environment for your employees. However, despite your wish to avoid it, chances are you are going to have to deal with one or more workers’ compensation claims in the future. Be prepared for this eventuality. Make sure you know the law and have the proper insurance coverage to protect your company.