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Worker's Compensation Might Not Cover You

The devil is in the details. Many workers arrive at work ready to do a good job in return for compensation, plus their employer's attention to their health and safety on the job. How a state frames worker's compensation laws, however, may leave injured workers without benefits.

(Photo Credit: StockMonkeys.com/Flickr)

Worker's Compensation Law

At Cornell University Law School, they explain that worker's compensation laws (worker's comp) are designed to cover the costs of employees injured on the job. These laws also protect the beneficiaries of workers who are killed on the job.

Part of worker's comp provides protections against liability lawsuits against the employer or co-workers. Worker's comp is considered "no fault," meaning the injured employee's hospital bills, care, and any disability is paid for by the employer's insurance company. Third party is an exception to "no fault," and can be filed in some states if a third party caused the accident. For example, if somebody deliberately knocked you off a ladder at work, you could sue that person under the third-party exception.

Federal worker's comp laws cover federal employees. State statutes govern worker's comp in each individual state. Employees and workers need to know how and when they are covered.

Subcontractors

The Utah Supreme Court recently concluded that subcontractors need not be covered by the general contractor's worker's compensation insurance.

When a general contractor has subcontractors on a worksite, this is know as a "multi-employer" worksite. Federal law requires employers to cover and protect all employees on a worksite, including subcontractors who are there to work. In a hotly contested lawsuit in Utah, the Utah Supreme Court has reversed a ruling against Hughes General Contractors. The court is claiming that the state's language that employers must provide safe workplaces for their employees does not include subcontractors.

New York Law

For comparison, in the state of New York, all workers on a jobsite are covered by the business's worker's compensation insurance, with the exception of independent contractors. Sub-contractors are covered.

Job Site vs. Subcontractor

The National Association of the Remodeling Industry reminds businesses that, depending upon the state and the size of the business, subcontractors may not be covered by their own worker's compensation. This gets costly when workers get injured -- and accidents do happen. No matter how careful people are, accidents do happen.

The point is that if you work as a subcontractor, make sure you know who is covering you and for what. Better to ask ahead of time than to end up mired in lawsuits and appeals while the owners of the worsite, general contractors, and subcontractor companies battle out who pays for your broken leg. The devil is in the details.

Tell Us What You Think

Do you work as a subcontractor? What happens when somebody gets hurt on the job? Leave a comment or join the discussion on Twitter.

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