Does Your Photography Business Need Worker’s Compensation Coverage?
As a business owner you have the responsibility of providing Workers’ Compensation insurance. It differs by state, but is required across the board. In order to provide the correct coverage, you have to know who is considered employees within your business. This can be confusing at times, but there are 5 major factors that are considered when deciding if an individual is an employee and must be covered. These are:
- Right to control
- How much control someone exercises over someone they contract is important is deciding if they are an employee. Generally, if the person is being controlled and tasked by an employer then they are an employee. The less control, the more likely it is an independent contractor.
- Character of work
- If someone is being hired to do work that is the primary job of the business, then they are an employee. The more different the tasks, the more likely it is to be an independent contractor. For example, an accountant in an accounting office is an employee, but a plumber fixing a toilet in an accounting office is an independent contractor.
- Method of payment
- People that are paid wages on an hourly, daily, weekly, etc. basis tend to be employees. If the hiring business withholds taxes and employee benefits then that is an employer/employee relationship. If payment is made once for a task as a whole then it is most likely an independent contractor.
- Furnishing equipment/materials
- If the business provides the materials and tools needed to get the job done, then it is an employer/employee relationship. If the person provides their own materials then it is more likely and independent contractor.
- Right to hire/fire
- If a business has the power to hire and fire the working individuals then it is employers doing the work. Independent contractors tend to have more control in how they perform work. However, their services can still be terminated if they do not meet contractual requirements.
When deciding if someone is labeled as an employee, all factors must be looked at. Just because one factor says that someone is an employee does not necessarily mean all the other factors will too. It takes a combination of all of them to decide whether or not they should be covered under your Workers’ Compensation policy.
Still confused or have questioned about if someone would be covered? Contact us today and let us help you get the coverage you need!Filed Under: Blog