I have a 1099 contracted nail technician who failed and fractured her ankle. She needs surgery and got it. Am I as a shop owner, am I responsible for paying for her medical care and time off? It is understood as in the Vietnamese nail salon business that all nail techs are contracted workers. She gets paid with a business check week. All of our nail technicians are paid with a business check weekly and received a 1099 at end of year. We do not have a paper work signed stating that the nail technicians are 1099s. We have been operated this way for 7 years as are all other nail salons in the US. In addition, we have not purchased worker's comp insurance for 1099 employees.
You should contact a NC workers compensation attorney that represents employers. This area of the law is changing and the way that you have been doing business in the past may not work going forward. The courts in several states have concluded that many people that companies have called independent contractors are actually employees for the purposes of workers compensation. It is much easier to carry coverage for these employees than to face a serious claim without insurance.
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It's hard to answer this question without knowing more of the details, but in general, if you are not required to have worker's comp insurance for a worker, than that worker won't be covered under your worker's comp. However, it can be very difficult to determine whether or not someone is an employee or a contractor. I would suggest at the very least consulting with a worker's comp attorney in your area. Most of them offer free consultations so you can get a more detailed answer at no cost to you. I hope this helps.
If she was in your premises when injured, she may have a claim regardless of whether she is 1099, employee or invitee. If anything, workers comp is likely to be a smaller claim than as a 1099 or invitee. Workers comp often favors the employer. Your general liability insurance may help you if it is not workers comp.
Odds are decent that she can be found to be an employee under the facts you disclose. There may be ways to create a lease arrangement with management services agreement that avoid the employee question entirely while maintaining a relationship similar to what you have now. You may also be able to shift the risk of loss or injury to the leasee that will protect you better than now.
You should talk to an attorney to see if you want this incident to be workers comp. And then talk to possibly a different attorney to restructure your arrangements with the nail technicians for the future.
I disclaim everything and make no represention of the applicability or accuracy of anything I said here. You are not my client; i am not your attorney. I thought about making this disclaimer as a poem and quickly decided not to do so. Robert Frost can sleep easy.
You should find an attorney experienced in representing employers in general and in workers' compensation claims specifically. There are several laws that converge on the issue of whether a worker is an independent contractor or an employee. For example, in addition to workers' compensation there are implications under tax law, the Fair Labor Standards Act, and the Employment Security Act (unemployment). Depending on which law you are considering, different tests apply to determine whether the worker is an independent contractor or an employee.
This is general information and not legal advice: The fact that you call her a subcontractor and send her a 1099 does not make it so. Employee "misclassification" is a big workers' comp fraud issue in NC right now. If the Commission finds that this person was an employee and that you should have had insurance for the past seven years, then you are looking at having to pay the claim out of your pocket and getting fined as much as $100 per day for the last 7 years. That fine is around $255,500. And that is just for workers' comp fraud. If you are found to have misclassified your employees, the state and federal taxing authorities will be interested in getting additional money from you too, for failing to withhold and pay in employees' income and payroll taxes.
This answer is intended as general information and not as specific legal advice.
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