Question: Is a subcontractor required to carry workers’ compensation insurance if he is a sole proprietor?
Answer: No. Sole proprietors who have no employees are not required to carry workers’ compensation insurance. However, the subcontractor must provide detailed information to his insurer to prove that he is a true independent contractor. If your insurer determines that the sole proprietor is your employee, you will then be charged for his payroll as per the appropriate classes on your insurance policy. It is your responsibility to provide the insurer with all of the appropriate documentation to help ascertain the employment status.
Disclaimer: The above article is for instructive purposes only and each case is fact sensitive. Consultation with an attorney should be obtained instead of reliance upon the legal issues discussed in this column.