Workers Comp? But that employee is a 1099! (Who needs coverage)

"Are you a business owner? Thinking of starting a business? Perhaps your business is booming and you need to hire some help? Did you know it’s a California State Law to carry Workers Compensation insurance if you have employees? Perhaps you want to use independent contractors (aka 1099s)? You could still be held responsible for their Workers Compensation insurance.

How you ask?

If you have 1099’s that strictly work for you, on your time, at your demand, and you have the right to direct and control then you are responsible for providing Workers Compensation Insurance.

Protect yourself!

Verify the business or individual you hire has a license and insurance. If the industry doesn’t require a license, other tests to determine eligibility include:

• Whether the person performing the service has independently chosen the burdens and benefits of self-employment.
• Whether the person performing the service is engaged in a distinct occupation or business.
• The skill required in the particular occupation.
• Whether the employer or the person performing the service supplies the instrumentalities, tools,

and place of work.

• Whether the person performing the service has the right to hire and terminate others.
• The right to terminate the relationship at will.

How is the WC policy rated?

• Rate x $100 payroll x Experience Modifier= Premium

Premiums are determined at final year end audit. The insurance company verifies your projected payroll and your actual payroll records match. You could get a refund or you could get a bill. The goal is to break even and have a $0 balance. If your annual premium is less than $30,300, you will not have an Experience Modifier.

If you have questions or would like to learn more, contact us today!

Aloha West Insurance

760-547-2626

www.alohawestinsurance.com

"

Post written by Kelly Dirk. 

Link to post:

https://www.linkedin.com/pulse/article/20140911192139-338837230-workers-comp-but-that-employee-is-a-1099-who-needs-coverage?trk=object-title

--Permission granted to use as blog by Kelly Dirk as Employee of Aloha West Insurance--