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Wednesday, August 26, 2015

Workers' Compensation in Montana (Part II)

FACTORS THAT AFFECT COVERAGE

The nature of your business, number of employees being covered and past coverage and claims are all factors in how much your premium will cost. Worker’s compensation comes down to three things:

What do you do? 
Workers' compensation premiums are calculated, in part, by the kinds of work performed. Many businesses have multiple functions performed by different kinds of employees - others have just a few people who wear many different hats. It's important to classify employees accurately - based on what they spend the majority of their time doing - because this could alter your premium dramatically.

What’s your record? 
Any claims, big or small, can influence your premium. A long history of no claims makes your business desirable to insurance carriers and can get you lower rates. If you've been in business for less than three years, you don't have as much past record to evaluate.

Where do you live?  
Who needs to be covered by the policy, where you can buy it and how much it will cost are all mandated or influenced by state law. Your business must comply with the states where your employees perform work - not necessarily where the business was founded or is based. If your business operates in multiple states, or employees travel across state lines to work, you may need to modify your policy to guarantee coverage in the event of a claim.

MULTI-STATE EMPLOYERS

If you employ workers in multiple states or your employees are temporarily working out-of-state, you may need to purchase insurance for all the states where your workers are located, according to each state's laws. Workers required to be covered by a Montana workers’ compensation policy include:
  • Montana residents whose duties are primarily performed in Montana or duties are controlled within or from Montana including while “temporarily” out of state; 
AND
  • Non-residents whose principal duties are performed within Montana on a regular basis or non-resident employees of an employer from another state engaged in the construction industry within Montana.

If you have workers performing work outside Montana, you may be required to provide workers’ compensation coverage in the other state. It is your responsibility to secure such coverage. Recent legislation has reduced requirements to cover all employees in both North Dakota and Montana. Montana employees excluded from Montana workers’ comp coverage include Montana residents who work solely in North Dakota and are required to be covered or are currently covered under a North Dakota policy.

INSURING YOURSELF

If you are a sole proprietor, partner or member of an LLC: In Montana, you are excluded from coverage but have the option to include yourself.

If you are a corporate officer: Montana includes you in coverage, but you have the option to exclude yourself.

Wednesday, August 19, 2015

Workers' Compensation in Montana (Part I)


WHAT TO KNOW

You are required to carry workers' compensation insurance in Montana if:


  • You have any employees working in Montana, whether full-time or part-time.
  • You’re hiring someone who is not an employee who doesn't have an independent contractor exemption or their own policy coverage. Make sure any independent contractors either have an ICEC (Independent Contractor’s Exemption Certificate) issued by the Montana Department of Labor and Industry or proof of workers’ compensation insurance. In Montana, it is the employer's responsibility to verify this documentation or risk being held liable.
Employee or independent contractor? It’s important to know if you - or if someone you’re hiring - would be considered an employee or an independent contractor. This determines who will be held responsible for medical bills or lost wages should you get injured on the job. A number of factors are reviewed when evaluating your status. Here are some things to think about:

  • Are you directed on how the work should be performed or simply the final product? An employee will generally be directed on how a project should be completed, while an independent contractor will use his own methodology.
  • Does the business provide training for you? This indicates employee status.
  • Are your services a substantial or integral part of the business? This indicates employee status.
  • Does the business require that you personally perform all services, or can you hire and pay your assistants? Independent contractors may have the option of hiring other contractors to perform their work.
  • Do you have profits and losses independent of the business? This is an indication that you are running your own business as an independent contractor.
  • Do you have an ongoing relationship with this business? While you and the company may simply have a good working relationship, the IRS may view this as an indication of employee status.
  • Do you set your own schedule and hours? This suggests you’re an independent contractor.
  • Are you required to work full-time? This is an indication of employee status.
  • Are you allowed to work for other clients? Do you provide your own tools and equipment? This indicates that you are an independent contractor.
  • Can the relationship be terminated at any time? This suggests employee status. An independent contractor would only be discharged for failure to meet contract specifications; likewise, an independent contractor is under contract and cannot quit until the project is completed.

Other regulations that may affect you:

Workers' compensation insurance covers wage replacement and medical bills for employees injured on the job. To protect against other injuries at your place of business, you may need general liability insurance. A general liability policy protects the insured company and its assets from a lawsuit resulting from third-party bodily injury, property damage or personal and advertising injury (such as libel or slander), caused by direct or indirect actions of the insured. For example, if a customer slips and falls in your restaurant or trips in your store. General liability insurance gives you the added peace of mind in the event of an accident.