One thing that all employers should be aware of is that each state has their own set of rules regarding worker’s compensation, so if you have employees in different states, it’s best to inform your broker so you will have the proper coverage for your employees. When discussing options with potential or current clients in regards to worker’s comp coverage, it becomes clear that this type of Orange County business insurance coverage is not what they would like to spend any time discussing, but it is important initially to get the proper coverage to prevent unwelcome surprises down the road.
Once we present the client with the quote, complete with all the codes the employer will require for the coming year, the record-keeping that will be required of them, along with the time element, many employers just look at us and inform us that it’s just easier for them to 1099 their employees, so they won’t be required to carry any worker’s comp insurance at all. At this point, we inform the client, it is just not that easy, since carriers are really cracking down on what constitutes an independent contractor these days. All Worker’s Comp carriers have very strict guidelines on what constitutes an independent contractor.
Carriers have their only list of rules on how independent contractors are classified. We advise our clients to contact their workers’ comp carrier and request a clear set of guidelines from them regarding the use of independent contractors, so their company can comply and plan accordingly based on those guidelines. Your company doesn’t want a huge audit invoice because they didn’t follow the guidelines.