Hiring an independent contractor a great way to expand your company’s products and services without adding overhead. The right sub can make you look good.
Subcontractor or Employee?
By Maine law, a worker is an employee unless they meet tests to be an independent contractor. That makes them subject to employment tax and workers compensation. If your Maine business hires independents, here’s what you need to do.
Get Documentation from Subcontractors
Workers compensation charges sub costs as payroll unless you have proof of subcontractor status. That can be a very expensive surprise. And the bill is due in lump sum.
Reduce Your Maine Workers Comp Costs
- Get a Certificate of Workers Compensation Insurance from each sub you hire. Or
- Get a Predetermination of Independent Contractor Status (WCB266) from each sub. Collect the WCB266 BEFORE the job starts. Predetermination forms are NOT retroactive.
- Certificates and WCB266 are good for only one year. Get a new one every year.
Certificates of insurance and WCB266s are “get out of jail free” cards. Use them to avoid a costly workers compensation insurance audit.
For more Maine Workers Compensation insurance tips, contact Noyes Hall & Allen in South Portland at 207-799-5541. We’re independent and committed to you!