Are subcontractors covered under workers’ compensation?

Every state has its own guidelines regarding workers who suffer on-the-job injuries. Most employers must purchase insurance, which provides benefits to workers who have filed a claim following a workplace accident. When it comes to subcontractors, however, North Carolina workers’ compensation laws can be complex.

Such issues might affect you in one of several ways. You might be a principal contractor (owner of a company) who has hired a subcontractor with a special skillset to help you complete a project. Then again, you might be an employee who is working for a subcontractor. Or, you might be a subcontractor who works independently, with no employees on your payroll.

A principal contractor may have liability for subcontractor’s employee’s injuries

North Carolina workers’ compensation laws include statutes that would possibly hold you responsible as a “statutory employer” for a subcontractor’s employee who has suffered injuries on a project for which you are the principal contractor. In such a case, your workers’ comp insurance would provide benefits to the worker in question if he or she had filed a claim, as opposed to collecting benefits from his or her direct employer’s insurance.

What if you are self-employed and working as a subcontractor?

If you are a subcontractor who has no employees, you still might want to consider purchasing a workers’ compensation insurance policy. A principal contractor may not necessarily need to carry a policy that covers you. Also, you may encounter projects where a principal contractor or client requires proof of workers’ comp insurance before hiring you.

What are some of the expenses that workers’ comp benefits cover?

As a North Carolina subcontractor, it’s imperative to seek clarification of workers’ compensation laws that govern this state before signing a contract for a construction project. It’s important to know whose policy will cover benefits if you suffer injuries on the job. Such benefits typically cover expenses such as medical bills, as well as replace lost wages if you’re unable to work during recovery.

Medical expenses would normally include costs you have incurred from doctors’ visits, surgery, physical therapy, prescription medications, hospital fees or other medication, devices or supplies necessary to your recovery.

A subcontractor is a separate entity

Keep in mind that a subcontractor is not on the payroll of the principal contractor, nor is an individual working in this capacity employed by a client. For a subcontractor, there are two possibilities: You’re either an independent subcontractor with no employees or you’re an employee of a subcontracting company.

In most cases, a principal contractor does not need to purchase workers’ compensation insurance to cover a subcontractor’s employees in North Carolina. However, this is not always the case, which is why it’s critical to research workers’ compensation laws that may be relevant in your situation before signing any project contracts in this state.