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Delaware Workers’ Comp Covers Independent Contractors

November 13th, 2007 Posted by Amelia

A new Delaware law requires that employers maintain workers’ compensation insurance for contractors, independent contractors’ partners and sole proprietors in the construction industry. Senate Substitute 1 for Senate Bill 68, mandates that companies provide workers’ compensation insurance for almost every independent contractor.

The measure was signed into law by Governor Ruth Ann Minner on May 23, 2007. Part of the bill clarifies the requirement that partners and sole proprietors must maintain workers’ compensation insurance in the construction industry. This requirement went into effect on July 17, 2007.

There are some exceptions for executives under the new law. A total of four executive officers of a corporation may be exempt from workers’ compensation coverage, if they are shareholders. In addition, four members of a limited liability corporation may elect to be exempt from coverage under workers’ compensation insurance, as long as this is in writing.

According to the Delaware Division of Industrial Affairs, workers’ compensation is a system created by the Delaware legislature, that provides benefits to workers who are injured at work. Benefits are also paid to workers who contract a work-related illness.

Benefits under the Delaware workers’ comp program include medical care, temporary disability payments and compensation for any permanent impairment.

If a worker suffers a fatal work-related accident, benefits are paid to the family of the worker. In many cases, benefits are paid voluntarily. In other cases, the worker or the worker’s survivors must petition the Office of Workers’ Compensation for benefits.

Under state law, employers with one or more employees are required to carry workers’ compensation insurance. Employers may not charge an employee any portion of the premium or expense of carrying workers’ compensation insurance. Employers in the agricultural industry are not required to carry workers’ compensation insurance on employees, however, these employers may elect to provide coverage if they like.

In most cases, workers’ comp pays benefits even if the employee was at fault in the accident. However, in some cases, if the employee was under the influence of drugs or alcohol, and that caused the accident, benefits may be denied.

Certain requirements must be met in order to qualify for workers’ Compensation benefits. The requirements are established by law in Title 19, Delaware Code and are administered by the Delaware Department of Labor, Division of Industrial Affairs, and Office of Workers’ Compensation.

In many industries, workers considered to be independent contractors, rather than employees, are not covered. However, under this new law, virtually every independent contractor in the construction industry must be covered.

An employee who is injured should immediately notify the employer in writing of the injury or occupational disease, and request medical treatment. Failure to notify an employer or to accept medical treatment may prevent the employee from collecting benefits under workers’ comp.

Generally, workers may collect their salary or usual compensation if they must be out of work for more than 3 days due to a work-related injury or accident. At that time, the employer or a supervisor should be notified, in writing, by the employee that he/she is requesting payment of workers’ comp benefits.

In the case of work-related fatalities, one or more of the employee’s survivors, or another person acting on their behalf, must notify the employer.

If there is a disputed claim under workers’ comp, and the employer and employee cannot resolve it, they must file an application with the Delaware Office of Workers’ Compensation for a hearing before the Industrial Accident Board. The application must be filed within 2 years of the accident or within one year of the diagnosis of an occupational disease.

Workers’ comp benefits are generally paid by an insurance company. By law, every employer is required to file a First Report of Occupational Injury or Disease within 10 days after he or she learns of a work-related injury. One copy goes to the3 state Office of Workers’ Compensation and the second goes to the insurance carrier. This is true, no matter how minor the injury is. An employer may be fined $100 to $250 for failure to report an injury.