What’s the difference between an independent contractor or employee? It’s the Maine workers comp insurance <\/a>question that’s worth a lot more than $64,000: Guess wrong and you could end up with a huge Maine workers comp audit bill from your insurance company.<\/p>\n\n\n\n Maine workers comp policies pay the costs of medical and lost time damages for employees. <\/span><\/strong>Who’s responsible if a worker is hurt on the job? Contractors are not responsible for injury costs for independent contractors; the independent should buy their own workers comp insurance to protect themselves and their own employees. <\/p>\n\n\n\n Up to Now<\/strong> A new Maine law, effective January 1, 2010, (P.L. 2009, Ch. 452<\/a>) sets a new standard for defining an independent contractor in the construction industry. It says that a person is presumed to be an employee unless that person meets all 12 parts <\/em>of a new definition of independent contractor.<\/em> <\/span><\/strong><\/p>\n\n\n\n Contractors must pay Maine workers compensation insurance (by reporting the payroll to their workers comp insurer) for anyone who does not meet that new definition. Moreover, the employer must get pre-determination before each job starts, <\/strong>or all workers are considered employees.<\/p>\n\n\n\n Under \u00a0PL 2009, a contractor must obtain either:<\/span><\/strong><\/p>\n\n\n\n The Maine Workers Comp Board does not approve predetermination requests retroactively; the contractor must have the determination letter as of the date the work begins. Moreover, the Maine Workers Compensation Board took the position that a predetermination is required for each and every job<\/em> that the independent does, regardless of the scope or duration of the job.<\/p>\n\n\n\n Needless to say, this is proving to be a hardship for general contractors and independents alike. The contractor’s typical job is short-notice, and independent contractors are often hired on the same day, leaving no time for a predetermination request to work its way through the Workers Compensation Board. Contractors are paying higher workers compensation premiums to include independent contractors, or risk losing the work due to delays.<\/p>\n\n\n\n The 124th Maine Legislature has taken up LD 1815<\/a>, in an attempt to clarify subcontractor status and to ease the burden on the day-to-day operations of contractors. While a Predetermination of Independent Contractor Status would still be required, the predetermination would be valid for one year<\/strong>. At least a contractor would not have to have this predetermination for every job. They could keep this form in their files and thereby exclude the independent’s payroll from their workers compensation rating.<\/p>\n\n\n\n We believe the proposal to require a predetermination on an annual basis is a step in the right direction. We hope the Maine Legislature agrees.<\/p>\n\n\n\n For more information and advice about Maine business insurance<\/a>, contact a Noyes Hall & Allen Insurance agent in South Portland<\/a> at 207-799-5541<\/strong>. As an independent agency, we offer a choice of many of Maine’s preferred business insurance companies. That means we can compare insurance options to help you find the best fit for your business. <\/p>\n\n\n\n In other words, we’re independent and committed to you. <\/p>\n\n\n\n RELATED POSTS:<\/strong><\/p>\n\n\n\nIndependent Contractor or Employee – Why it Matters<\/strong><\/h2>\n\n\n\n
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Until recently, Maine workers comp insurance agents<\/a> instructed their contractor clients to obtain certificates of workers comp insurance from subcontractors. Then, when the insurance company conducted the Maine workers comp audit, the premium auditor would exclude the subcontracted cost when calculating workers compensation premium. This was an effective cost and risk control technique.<\/p>\n\n\n\nMaine Independent Contractor or Employee: a New Definition<\/strong><\/h2>\n\n\n\n
Best Practices for Employers<\/h2>\n\n\n\n
Emergency Legislative Relief Considered<\/h2>\n\n\n\n
For More Info about Maine Workers Compensation Insurance<\/h2>\n\n\n\n
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