At least once a week I have an uninsured subcontractor issue. Some common misconceptions:
- I’ll have them sign a waiver. Unfortunately, it's not that easy.
- Subcontractor has no employees and not required to buy work comp. Not an option for you.
The Illinois Workers Compensation Act reads - in addition to an employee the employer is liable to pay compensation to “any contractor or subcontractor unless such contractor or sub-contractor has insurance, in any company or association authorized under the laws of this State” blah blah blah. See definition of an Employer 1(a)3.
The Basic Manual published by the National Council on Compensation Insurance (NCCI) reads – “in those states where workers compensation laws provide that a contractor is responsible for the payment of compensation benefits to employees of its uninsured subcontractors, the contractor must furnish satisfactory evidence that the subcontractor has workers compensation insurance in force covering the work performed for the contractor.”
Basically, get your certificates in order to avoid being charged at time of a workers compensation premium audit!
If you are an employer in Illinois or the Chicago area and have more questions on this issue… feel free to contact me.