Are You Covered By Workers' Compensation If You Are A Subcontractor?

Workers' compensation is something every employer has to think about, because by law they are forced to take care of any injury that their worker has during their work shifts. If something happens, an accident on the work place, and it's directly caused by one of your job tasks, then the employer has to cover the medical bills. But what happens when you work as a subcontractor? What if your employer is actually a company that works for another company? Here's some information about workers' compensation and subcontractors you may wish to know.

Are You Covered By Workers' Compensation If You Are A Subcontractor?

As a general rule, the immediate employer is responsible for paying all benefits. That means if a contractor has a subcontractor working for him, then that subcontractor has to cover any employee he has as well. Every level of subcontractor has to do the same thing, which means if a 5th level subcontractor, in a large construction project, has an employee with an injury; he has to cover for it. However, in many cases it can be more complex than that. There have been many cases that went to the courts about who is responsible to pay for any benefit. In most cases, the result has always been the same, and the immediate subcontractor has to be the one. However, a few cases have turned out differently. For example, if the main contractor has significant say over what the employee does, then it may be that they become responsible for the workers' compensation as well.

But what happens if the subcontractor has no insurance? In these cases, then the next level becomes responsible, all the way up to the main contractor. This means even if an employee doesn't work for a specific company, that company may end up having to pay for his claims if he works for one of his subcontractors. This can cause major financial troubles for companies if they suddenly find out that some of their subcontractors aren't covered. One way these companies can protect themselves is by requiring a proof of insurance, usually a certificate that they have, issued by the insurance company. This way, the primary contractor knows that anyone they hire will be covered, and they won't wake up with having to pay large amounts of money after a workplace accident.

Are You Covered By Workers' Compensation If You Are A Subcontractor?

Workers' compensation is an important part of the labor force, especially in industries where accidents are more common. Fortunately, subcontractors typically have no issue getting their claims through, and when there is an issue, courts have usually sided with the worker, forcing the company to pay. Even if none of the subcontractors, or even the primary one, can pay the needed money, then States typically have a fund set aside for such cases, although each contractor may suffer fines and fees. When working in an industry where several levels of subcontractors exist, like in construction for example, it's important to make sure all the paperwork is in order.