Workers Compensation, Contractors and Employees: What You Need to Know

The State of Florida takes workers compensation seriously and there are both criminal and civil punishments for employers if they fail to maintain proper insurance. However, many employers, especially those in the construction industry, are still confused about their responsibilities. The reason is construction is a dynamic industry, involving multiple contractors and subcontractors.

Here is what you need to be aware of when it comes to the contractor/subcontractor relationship and workers comp.

Your Responsibilities As A Contractor/Business Owner
Construction work is inherently dangerous and people do get hurt. In construction, it is a normal practice for a contractor to hire subcontractors for specific parts of a job.

How does this affect the workers comp liability? Who is responsible for what?

Florida’s law states the contractor shall (there is no room for a choice) make sure the employees of the subcontractor have the necessary worker’s comp documentation. Furthermore, if one of the officers of the subcontracting company has elected to not have workers comp on himself/herself (often the case when the employee doesn’t actually work on the construction site), then the contractor is responsible to verify the exclusion.

Here’s the catch many people don’t realize. If the subcontractor is hired, and uses workers who aren’t insured by a workers comp policy, then the contractor is responsible. This is why it’s imperative for you to make sure your workers compensation is not only up to date for your company, but also for any subcontracted company.

This is also the reason proof of workers comp insurance is required when you bid on jobs and apply for licensing.

Busting A Couple Of Myths About Workers Comp Insurance
Myth: Collecting workers compensation is “free loading.”

Fact: Workers compensation is an insurance, it’s not a “free ride” to get out of working. The majority of people who use workers compensation are genuinely hurt and want to return to work.

Insurance companies work hard to make sure people are not only adequately compensated. They also investigate workers comp claims to ensure they are legitimate injuries and the injured are doing their part to get healed. Their diligence helps keep claims and premiums low.

Myth: Employees out on workers comp can’t be fired or laid off.

Fact: Workers who are legitimately injured cannot be fired because they were hurt and are recovering. However, if during the time they are recovering the job finishes and you have to lay them off from work because there is no future work, then they can still be laid off.

You may also fire them if their work doesn’t meet your company’s standards or if they are a hazard on the site. They may even be fired if their injury is a result of their poor performance. They will still remain off work, collecting their workers comp, but you may terminate them because they were unsafe.

The key to this is adequate and detailed documentation about what occurred and how their work performance caused the accident or is a danger to other employees.

As long as you don’t fire them because they were injured you are OK.

Flagler Financial is experienced with helping employers navigate the often confusing world of workers compensation. We offer custom solutions for a variety of industries and companies. If you have any questions, or would like to learn how we can help you, please contact us for a free consultation.