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Training/Employee or Independent Contractor?

Educational Series

Employee or Independent Contractor?

approx. duration: 2 hours
Instructor(s): Ron Cooper, Duane Schroeder
Frequency: semi-annually

WC Theory - Trade Risk for Certainty

  • Employer
  • No fault
  • Not sued
  • Employee
  • No fault (some exceptions)
  • Money
  • Medical care & rehab

  • Conflicting Goals
    Employers assumption of  financial responsibility for all work-related injuries

    Consequences

  • Creates an uneven playing field for those who follow the law
  • Undue burden for the true independent contractor to please others' insurance requirements
  • Contentious premium audits and related dispute resolution proceedings
  • Reduced credibility of the ratemaking database
  • Employee Definition
    "Employee means every person, including a minor, in the service of another, under any contract
    of hire or apprenticeship, written or implied, except one whose employment is both casual and
    not in the usual course of the trade, business, occupation, or profession of the employer."
    Reference IC §22-3-6-1 (b)

    Waiver of WC by Employee
    Prohibited as per IC §22-3-2-15

    Independent Contractor Definition
    "A person is an independent contractor in the construction trades and not an employee under IC§22-3-2 through IC §22-3-6 if the person is an independent contractor under the guidelines of
    the United States Internal Revenue Service."
    Reference IC §22-3-6-1 (b) (7) and IC §22-3-7-9 (b) (5)

    IRS Form SS-8

  • "Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax
    Withholding"
  • 46 questions
  • Categories:Behavioral Control
  • Financial Control
  • Relationship of the Worker and Firm
  • Service Providers or Salespersons
  • Issue determination or information letter
  • www.irs.gov/pub/irs-pdf/fss8.pdfeference

    Who Decides Who's Who?

  • WC Board
  • Indiana Courts
  • When?After workplace accident
  • Relationship at time of injury

  • Indiana Court of Appeals Decisions

    Independent Contractor "Clearance Certificate"  Clearance #45899

  • Certifies person is an independent contractor
  • Certifies person has WC insurance or is a qualified self-insurer
  • Person desires to be exempt
  • Foregoes the right of recovery from anyone for whom this person works as an independent
    contractor
  • Holds harmless any person and their carrier contracting with the above named person (as an independent contractor)
  • Independent Contractor "Clearance Certificate" Trivia

  • Valid for 1 year
  • $20 fee
  • $5 DOR fee
  • $15 WCB feeEffective 7 days after stamped by WCB
  • Contractor who assists employees in filing a false statement for independent contractor status commits a Class D felony.
  • Statutory Exemptions

  • Real estate professionals
  • Independent owner operators
  • Youth coaches
  • Carriers Right to Charge a Premium

    What? No Coverage!

  • If Uninsured Subcontractor,
  • General Contractor Pays...
  • Full contract price, or
  • Part that represents payroll, at least:
  • 50% L&M contract
  • 90% Labor only33% Vehicle contract
  • What Do I Do?

  • certificate of insurance
  • certificate of exemption (if in construction trades)
  • payroll amounts of a contractor
  • contract price
  • confirm status with carrier at inception