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Owner Operators

15 Sep

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Is an individual doing work for me an independent contractor or employee?

September 15, 2016 | By |

Several tests can be used to determine whether an individual qualifies as an independent contractor or employee for the purposes of state and federal laws. Fundamentally, all of these tests seek to answer the question, does the company control how the work will be performed (suggesting an employer-employee relationship) or does the company deal only with the results of this work (suggesting an independent contractor relationship)?

Five of the most common tests are:

  • IRS Factor Control Test (or 20 Factor Test): used in regard to IRS withholding, Immigration
  • Economic Reality Test: used in regard to Fair Labor Standards Act, Workers’ Compensation, Discrimination
  • Relative Nature of Work Test
  • ABC Test: used in regard to Unemployment benefits
  • Common Law Test (or Right to Control Test:) used in regard to Discrimination, ERISA, Worker Adjustment and Retraining Notification Act, National Labor Relations Act, Labor Management Relations Act

The test used depends upon the particular statutes or government agencies involved. Please not that these tests are only guidelines and are not applicable in every situation. Therefore, a worker may be considered an employee under one statute, but an independent contractor under another.

Misclassifying employees as independent contractors carries financial risks. In addition to penalties and fees, companies may also be charged with liabilities including back taxes and overtime. This may also open the company to lawsuits related to:

  • Denial of ERISA and other benefits
  • Denial of Workers’ Compensation
  • Denial of Family Medical Leave Act (FMLA)
  • Discrimination for failure to accommodate for a disability
  • Failure to include the individual in employee count which resulted in the company appearing not to be required to comply with Title VII, ADA, ADEA, FMLA, WARN Act, Affirmative Action, or other state or federal employment laws
  • Failure to retain proper tax forms for employees
  • Disputed ownership of rights to completed work

For more information and relevant forms, visit http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee. For more information on this and other insurance topics and coverage, please call our office.

01 Aug

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What is Occupational Accident Insurance?

August 1, 2016 | By |

Occupational Accident Insurance provides medical, disability, and accidental death and dismemberment benefits, but it’s not Workers’ Compensation.

Medical Coverage

Our Occupational Accident Insurance offers our clients freedom of choice; they aren’t directed to a network of doctors or hospitals, rather, they can see their family doctor or specialists recommended by their doctor to treat covered accidental injuries, up to the limit of the policy.

Temporary Total Disability

If an individual is unable to work due to a covered occupational accident and medical treatment is necessary, our occupational accident insurance provides compensation for lost income, with some plans offering weekly maximum benefits of up to $700 per week for up to two years during recovery.

Continuous Total Disability

Should a covered injury result in a permanent total disability, individuals may be eligible for a Continuous Total Disability benefit once Temporary Total Disability benefits have expired.

Accidental Death and Dismemberment

Accidental Death and Dismemberment benefits are designed to help individuals and their families adjust to lifestyle changes that result from permanent critical injuries. The included death benefit will provide for dependents should an individual not survive a covered accidental injury.

For more information on this and other insurance topics and coverage, please call our office.

23 Jun

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Workers’ comp vs. Occ Acc: what’s the difference?

June 23, 2016 | By |

Workers’ compensation is a state-regulated program, and is required of employers who employ three or more employees at any one time, or employ one or more employees for 35+ hours per week for 13 or more weeks by law in most states. It may cover wage-loss benefits, medical treatment, and rehabilitation—related medical expenses—for employees who suffer a work-related injury or illness. Workers’ compensation also includes employer liability coverage, which may provide protection to an employer if an employee sues the employer in indirect relation to a workers’ compensation claim, often covering legal defense costs, up to the policy limits. Workers’ compensation doesn’t eliminate the issues of an unsafe workplace, however, and employers have a responsibility to maintain a safe working environment for their employees. Click here for specific answers to frequently asked questions about workers’ compensation.

Occupational accident insurance may provide medical, disability, and accidental death and dismemberment benefits, but it’s not workers’ compensation—it isn’t state-regulated or state statutory. Occupational accident policies may cover wage-loss benefits, medical treatments, and rehabilitation for employees or covered independent contractors, but only up to the policy limits. Employers are allowed to choose their coverage and deductible amounts, based upon the employer’s perceived risk.

While workers’ compensation policies typically involve a higher cost to the employer, they may offer more comprehensive coverage, particularly in terms of employer liability, which is not a component of occupational accident coverage. However, owner-operators and other drivers who qualify as independent contractors are not always covered under state workers’ compensation laws; while employee classification is determined by the federal government, workers’ compensation laws are determined by the state government. For these drivers, employers may want to consider occupational accident coverage.

For a useful infographic delineating the differences between workers’ compensation and occupational accident policies, click here. For more information on this and other insurance topics and coverage, please call our office.

06 Jun

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Michigan Now Using 20-Factor Test to Identify Independent Contactors

June 6, 2013 | By |

Motor Carriers, and other companies, operating in Michigan please take note:  Effective January 2013 Michigan’s Workers’ Compensation Agency Department of Licensing and Regulatory Affairs began using the IRS’s “20-Factor Test” to determine if an individual is an independent contactor or an employee of an organization.

Employers must comply with state and federal employment and tax laws, including withholding certain taxes, contributing toward unemployment and providing workers compensation insurance for employees; requirements which would not apply to independent contractor’s whose services are being hired by the motor carrier.

It is vital that organizations who utilize the services of independent contractor’s familiarize themselves with the “20-Factor Test” and review any concerns with their attorney, accountant and insurance agent to ensure compliance.  States are and will continue to ramp up their efforts to identify those companies who are misclassifying workers, as they now have a greater financial incentive to do so.  When 2014 Fiscal Year budget was passed not only did it include continued funding to help states locate misclassified workers, but additional funds were made available to provide “high performance bonuses” for those states most successful at identifying and prosecuting employers who are misclassifying their employees.

A complete list and description of the “20-Factor Test” can be found here.  The 20 topics discussed include:

1.) Instructions

2.) Training

3.) Integration

4.) Services Rendered Personally

5.) Hiring, Supervising and Paying Assistants

6.) Continuing Relationship

7.) Set Hours of Work

8.) Full Time Required

9.) Doing Work on Employer’s Premises

10.) Order or Sequence Set

11.) Oral or Written Reports

12.) Payment by Hour, Week, Month

13.) Payment of Business and/or Traveling Expenses

14.) Furnishing of Tools and Materials

15.) Significant Investment

16.) Realization of Profit or Loss

17.) Working for More Than One Firm at a Time

18.) Making Service Available to General Public

19.) Right to Discharge

20.) Right to Terminate

Do you have questions concerning the classification of your employees or the handling of independent contractors?  Call us today at (800) 596-TRUCK (8782).  At the Navigator Truck Insurance Agency we work hard to be helpful, accessible and result oriented.

15 Feb

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Occupational Accident Insurance

February 15, 2010 | By |

In December I posted the answers to some frequently asked questions regarding workers’ compensation insurance.  As I explained, in some cases individuals cannot purchase workers’ compensation for themselves.  Additionally, many individuals choose not to include themselves in coverage due to the costs.  However, just because workers’ compensation isn’t the perfect fit for you doesn’t mean you should go entirely without some sort of protection against work related injuries.  Instead, consider the many benefits an occupational accident (Occ/Acc) policy can provide to you at a very reasonable monthly premium.

 

Let’s start with a basic explanation of the coverage.  Occ/Acc is not workers’ compensation, but is similar in that it helps pay for medical bills related to an on the job injury and provides some compensation for lost wages.  Many Occ/Acc policies that are written for professional truck drivers will even extend coverage to include passengers who are injured or killed while riding in your truck. 

 

Below is an outline of four major features of an occupational accident policy:

 

1.)    Accidental Death & Dismemberment: Pays one lump sum and, in many cases, additional monthly payments to you or, in the event of your death, your survivors, to help adjust to the lifestyle change as a result of the accident.

 

2.)    Accidental Medical Expense: Pays medical treatment costs associated with job related injuries, up to the policy limits and subject to any applicable deductible.

 

3.)    Temporary Total Disability: Supplements your income in the event that an on the job injury results in your being unable to work for an extended period of time.

 

4.)    Continuous Total Disability: Extends the Temporary Total Disability Benefit if your injury has been deemed permanent.  The amount paid is normally offset by your available Social Security Disability Income.

 

The cost associated with an occupational accident policy is extremely affordable, with premiums starting as low as $130 a month.  Policy limits range from $500,000 to $2,000,000.

 

Is occupational accident coverage the right fit for you?  Give us a call today at (800) 596-TRUCK(8782) to learn more or request a quote.  All of us at the Navigator Truck Insurance Agency work hard at being accessible, helpful and result oriented. 

 

Until next month,

 

Jeffery A. Moss

President