Workers compensation is a no-fault system of benefits provided by States to most workers who have  job-related injuries. If your church has employees, you are required by law to buy workers’ compensation insurance.

One question we often get asked is, what is an employee? An employee can be a full-time or part time person, working on behalf of the church. Temporary and seasonal staff can also be defined as employees. Many people seem to think that just because someone isn’t a full-time employee they don’t need to have workers’ compensation coverage. Not true. Under all these cases you are required to have workers’ compensation insurance.

The way you pay your employee does not impact whether or not they are considered an employee. You can 1099 somebody and have him or her withhold his or her own taxes and you are still required to carry workers’ compensation coverage on that person. Don’t confuse tax laws and workers’ compensation laws. These laws and statutes are completely unrelated.

Here are a few additional tests to determine the employer/employee relationship:

• Do you control the workplace?
• If the person takes direction from ownership or management they are employees.
• Do you supervise them?
• Is their time controlled (lunch, breaks etc.)?

What Does Work Comp Cover?

Most if not all injuries or illnesses that are caused by, through or on the job, are covered under workers compensation laws. Typically the benefits are defined as:

• Medical – cost of medical treatment
• Time loss – lost wages
• Disability/rehabilitation  – total or partial disability which may require re training or rehabilitation to return to work

What about independent contractors?

An independent contractor is someone who owns their own business, so they control their own working hours. They control how they get the job done. They are the people to which you give a project, they return a completed project, and they are usually completely unsupervised by you. So, if you have someone who fits into this definition, you probably don’t need to carry workers’ compensation coverage on that person.  However, it is always a good idea to call is to help you review each situation.

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This entry was posted on October 21, 2014 at 11:49 pm. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Posted in Church Insurance by Scott Stuart Comments Off on The Importance of Workers Compensation Insurance