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Worker’s Compensation is Important – Even When You Have No Employees

I’ve been getting a lot of questions on Worker’s Compensation lately.

If you have a W2 employee paid by Association payroll -maybe a super, porter, or doorman- then New York State mandates that Worker’s Compensation coverage must be maintained for that employee by the employer/Association.  If that same employee is an independent contractor and files a 1099, coverage is not required by the state.

What changes?  What happens if that same employee gets injured while taking out the garbage or changing a battery in the smoke detector of the lobby?  If your 1099 super gets hurt while working for the Association and needs time off, surgery, or can never work again, they are definitely going to seek some payment for loss of wages, medical expenses, and/or pain and suffering.  If the Association does not have a Worker’s Compensation policy where is this payment coming from?  The Association would mostly be responsible and it can be very costly.  Here’s the best way to avoid a huge exposure like this:

Maintain a Worker’s Compensation policy or an If Any Worker’s Compensation policy.

Even though the state does not require you to have Worker’s Compensation coverage if you have a 1099 employee, you can have a policy anyway.  Use the payroll the employee gets, however they are paid, and have your broker provide some quotes for you.  Just because it’s not mandated doesn’t mean it’s not a good idea to protect yourself and your Association.  A Worker’s Compensation policy will also pick up a contractor doing work in the building that possibly did not have their own insurance.  That alone has me sold.

An If Any Worker’s Compensation policy works like this:  Let’s say there are only 1099 employees at your Association, or maybe none at all.  Well, an If Any Worker’s Compensation is just that. If Any person is doing Association “work” on behalf of the Association, designated by the Association, then coverage would be provided if they were injured while doing the Association work.  Here are some examples:

An employee of an uninsured contractor is injured at the association and the employer has not provided proper coverage. The association may be required by the local Labor/Industrial authorities to step in as the “employer” as it relates to Labor Code benefits owed that injured employee.

A volunteer working on behalf of the association is injured during the course of their duties. The association should (and ultimately may be required to) treat that injury as “work-related”, thereby requiring benefits owed under the Labor Code.

A 1099 independent contractor is injured at the Association while removing the trash which was directed by the board of directors.  The board in this case is acting as the employer which makes the 1099 contractor an employee. The association should (and ultimately may be required to) treat that injury as “work-related”, thereby requiring benefits owed under the Labor Code.

Bottom line – speak to your broker about how important it is to have Worker’s Compensation coverage for your Association.  Policies can cost as low as $800 for the year and will save you a ton in the long run.

Reach out to me anytime with questions, I’m always happy to help!

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