Workers’ Compensation Insurance

Are You Required to Carry Workers Compensation Insurance?

When it comes to Worker’s Compensation rules in Illinois, it’s pretty basic. If you have 1 or more employees, whether full or part-time, you are required to provide Worker’s Compensation protection. Where it gets a little murky is when employees are paid under 1099 Independent Contractors rules.

While paying an employee under a 1099 can save you money, this may not relieve you of your responsibility as a business owner to provide Worker’s Compensation and other benefits. Also, courts have determined that if there is an “Employer-Employee” relationship and you pay the employee on a 1099, you may be breaking the law! Failure to provide Worker’s Compensation coverage can result in having the State of Illinois shut down your operation, not to mention that if you didn’t have insurance and there was a claim, your business could be responsible for thousands of dollars or more in medical expenses and lost wages.

Here are some guidelines to help you determine if your 1099 employee(s) are misclassified and would be entitled to Worker’s Compensation and other benefits:

• You set their schedule
• You provide the equipment and tools needed in order for the employee do the job
• The employee is not free to work for others
• You tell them how to do their job
• You measure their performance (such as an annual review)

If you would like more information, please contact our office.

Learn more about Illinois Workers Compensation requirements.