As a former “independent contractor” with American Family, I can speak first hand about the abuse of mis-classifying Agents as Independent Contractors rather than Employees. A current class action court case:1:13-cv-437 filed in Ohio (Walid Jammal v/s American Family Insurance) may turn the Captive Companies upside down and stop these Captives from abusing the people responsible for building the company without reaping any of the benefits, literally!
This can be quickly resolved by the 10-99 employee getting their own WC policy if they are a true independent contractor.
As an agent looking to insure a company with this exposure, underwriters will let you know their tolerance on it case by case as there does not seem to be a standard fit for all scenarios.
DC-
1099 doesn’t mean the person is actually an “Independent Contractor”.
The courts have sided over and over again with an Independent 1099 contractor who got hurt or became ill while working for a company. The definition of independent contractor is sited on your STATE’s DOL websites as well as under the Federal DOL.
NY has a long list of what is and isn’t an independent contractor so being paid on a 1099 doesn’t actually mean anything. In today’s market, the line is blurred so if an employer doesn’t cover a person under their W/C or Govt required Disability policy, the employer can still be liable for that 1099’s work related loss of earnings, medical expenses and more. I would say if the person carries their own Workers Comp and state mandated disability, signs a contract making their own hours with a specific task time frame of start to finish,specifically described, then the courts MIGHT favor the employer. More importantly in this CMS work world, I am curious to see how the courts will react when 1099 people claim they were not offered health coverage or other benefits because they could prove that although they got paid on a 1099, they were truly an employee.
…independent contractor is available to OTHER companies for a work involved relationship…. whenever that contractor works for that co..for that day… the co that employs that contractor for that day.. is liable for the w.c….
Sadly, most of these agents vote for the very people that allow this scam to perpetuate. We all know 1099 agents from captive carriers are slaves but they skirt around it.
an employer failed to pay me fully, I was a casual laborer for a property management company, doing small tasks assisting one of its other workers, they provided most tool and all material, then short paid me the amount agreed because the former tenant did not pay them.
when I said I would take legal action, the employer reported me to LNI as ‘working as an unlicensed contractor’, and fined me $1000, I appealed and was not permitted to present a case of worker misclassification. I filed a wage complaint, OAH Judge says the owner was not on-site for most of the time to supervise me (control), but did not factor in the other worker who supervised, or the fact the employer had ‘ the right to control’. I also had never done this type of work for my self or others as a business.
I am now about to file a Pettion For Review. WA LNI, the AAG, and OAH have been very disappointing, but i hope truth will prevail.
As a former “independent contractor” with American Family, I can speak first hand about the abuse of mis-classifying Agents as Independent Contractors rather than Employees. A current class action court case:1:13-cv-437 filed in Ohio (Walid Jammal v/s American Family Insurance) may turn the Captive Companies upside down and stop these Captives from abusing the people responsible for building the company without reaping any of the benefits, literally!
This can be quickly resolved by the 10-99 employee getting their own WC policy if they are a true independent contractor.
As an agent looking to insure a company with this exposure, underwriters will let you know their tolerance on it case by case as there does not seem to be a standard fit for all scenarios.
If you are 1099’d you are an independent contractor.
“the economic realities of the relationship, and not the label [or tax form] an employer gives it, are determinative.”
DC-
1099 doesn’t mean the person is actually an “Independent Contractor”.
The courts have sided over and over again with an Independent 1099 contractor who got hurt or became ill while working for a company. The definition of independent contractor is sited on your STATE’s DOL websites as well as under the Federal DOL.
NY has a long list of what is and isn’t an independent contractor so being paid on a 1099 doesn’t actually mean anything. In today’s market, the line is blurred so if an employer doesn’t cover a person under their W/C or Govt required Disability policy, the employer can still be liable for that 1099’s work related loss of earnings, medical expenses and more. I would say if the person carries their own Workers Comp and state mandated disability, signs a contract making their own hours with a specific task time frame of start to finish,specifically described, then the courts MIGHT favor the employer. More importantly in this CMS work world, I am curious to see how the courts will react when 1099 people claim they were not offered health coverage or other benefits because they could prove that although they got paid on a 1099, they were truly an employee.
…independent contractor is available to OTHER companies for a work involved relationship…. whenever that contractor works for that co..for that day… the co that employs that contractor for that day.. is liable for the w.c….
Sadly, most of these agents vote for the very people that allow this scam to perpetuate. We all know 1099 agents from captive carriers are slaves but they skirt around it.
an employer failed to pay me fully, I was a casual laborer for a property management company, doing small tasks assisting one of its other workers, they provided most tool and all material, then short paid me the amount agreed because the former tenant did not pay them.
when I said I would take legal action, the employer reported me to LNI as ‘working as an unlicensed contractor’, and fined me $1000, I appealed and was not permitted to present a case of worker misclassification. I filed a wage complaint, OAH Judge says the owner was not on-site for most of the time to supervise me (control), but did not factor in the other worker who supervised, or the fact the employer had ‘ the right to control’. I also had never done this type of work for my self or others as a business.
I am now about to file a Pettion For Review. WA LNI, the AAG, and OAH have been very disappointing, but i hope truth will prevail.