I have a small company I am a 1099 of and their insurer (Hartford) says they need to pay workers compensation insurance for me. There is no way I could possibly be considered an employee, I am a 1099. I have been a 1099 for many companies over the years and I have never once been asked something similar and I am really confused. Since I am not directly talking with the insurance people I really don't have a good handle except for asking questions. Here is what the company said me from an insurance agent I believe:
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This issue arises not only in California but also all over the nation because many court cases have confirmed that 1099 classification made by an employer (like you) is not a sufficient factor to exclude the employer's contractors from its worker's compensation insurance coverage. In other words, if your 1099 classification is not agreed by your insurance company, your insurance company will ask you to submit your 1099 contractors' own worker's compensation coverage certificate or to include your 1099 contractors in your insurance policy if your contractors do not have their own insurance.
As I explained to you, your insurance company believes that contractors NOT ENTIRELY INDEPENDENTLY helped your biz operation and thus they should be included in your policy. You may argue against the insurance company's decision (opinion) by hiring an insurance or labor attorney or by filing an appeal to the insurance company, but it would cost to you.
That's why I recommended you advise your contractors to set up their own S-corp not only to avoid this issue easily but also to help their income tax burden. This solution is adopted by many of contractors nowadays."
Does anyone have an experience with this? The only thing that would make sense is if somehow they are classifying me as an employee, which I am definitely not.
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This issue arises not only in California but also all over the nation because many court cases have confirmed that 1099 classification made by an employer (like you) is not a sufficient factor to exclude the employer's contractors from its worker's compensation insurance coverage. In other words, if your 1099 classification is not agreed by your insurance company, your insurance company will ask you to submit your 1099 contractors' own worker's compensation coverage certificate or to include your 1099 contractors in your insurance policy if your contractors do not have their own insurance.
As I explained to you, your insurance company believes that contractors NOT ENTIRELY INDEPENDENTLY helped your biz operation and thus they should be included in your policy. You may argue against the insurance company's decision (opinion) by hiring an insurance or labor attorney or by filing an appeal to the insurance company, but it would cost to you.
That's why I recommended you advise your contractors to set up their own S-corp not only to avoid this issue easily but also to help their income tax burden. This solution is adopted by many of contractors nowadays."
Does anyone have an experience with this? The only thing that would make sense is if somehow they are classifying me as an employee, which I am definitely not.
Save: $50 on Speed Hound Recovery Boots | $20 on Air Relax| $100 on Normatec| 15% on Most Absorbable Magnesium
Blogs: Best CHEAP Zwift / Bike Trainer Desk | Theragun G3 vs $140 Bivi Percussive Massager | Normatec Pulse 2.0 vs Normatec Pulse | Speed Hound vs Normatec | Air Relax vs Normatec | Q1 2018 Blood Test Results | | Why HED JET+ Is The BEST value wheelset