Workers' Comp: Who Needs It?


April 1, 2019

All employees need to be covered by workers’ compensation insurance, but did you know you may need to pay for coverage on your subcontractors?

Unless otherwise stated in the statute, an employer is responsible for the premium payment of its uninsured subcontractors unless; the subcontractor has coverage on the work performed for you or the subcontractor is a sole proprietor who has waived his rights to worker’s compensation pursuant to A.R.S. 23-961(O).

Here are ways to eliminate your obligation as an employer:

1.      A certificate of workers’ compensation insurance that was in force covering the work performed for you as proof of coverage for the subcontractor.

2.      The work being performed by the subcontractor is not “part or process in your trade or business” and a written agreement which satisfies a waiver proving the existence of an independent contractor relationship has been filed with and countersigned by your carrier. “Part or process in the trade or business” means an activity which is ongoing and ordinary or routine in the operation of the business. Independent contractor agreements will not be accepted for proof of waiver.

3.      The subcontractor is a legitimate sole proprietorship business (with no employees) who has waived his rights to workers’ compensation coverage, which includes the requirement that the “waiver” be signed and dated by your carrier.

*Waiver forms can be accessed from your workers’ compensation provider.

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