Workers’ compensation insurance provides coverage if an employee sustains an injury while working. This coverage provides reimbursement for medical bills and a portion of lost wages while the employee cannot work. A common misconception of business owners is that if an employee is part-time or seasonal they are not required to provide workers’ compensation coverage.

An employer is required by law to obtain a workers compensation policy for any employee hired, whether part-time or seasonal. It is also very important to be sure the relationship with any subcontractors hired is actually defined as a subcontractor and not an employee. The Workers’ Compensation Board has a predetermination of independent status form which determines the need for a workers’ compensation policy or not.

The requirement is based on the relationship instead of how the subcontractor is paid. Therefore, a subcontractor paid by a 1099 form may still be considered an employee if the relationship is that of an employee, not an independent contractor. Obtaining this pre-approval provides peace of mind to avoid uninsured injuries and penalties for not having a workers compensation policy if there should have been one in force.