In addition, if you are hurt on the job, it should be your employer’s workers’ comp coverage the responds, not your own health insurance. And if you cause an accident on the job and injure some else, you–if you are properly classified as an employee–should be covered as an insured under your employer’s commercial general liability policy, so that you are provided a defense and the insurer has to pay the settlement or judgment. As an “independent contractor,” you are not covered under your employer’s commercial general liability policy, and based on what you have written, it sounds like you do not carry your own professional liability insurance (like a true independent contractor running their own business would do). So, you potentially have no insurance to protect you in the event you are sued. I can’t imagine why people are comfortable operating this way–huge liability exposure for your employer, and for you.
I have insurance for health and if I’m hurt and out of work. I pay this myself. I don’t have liability for if I was sued. Is that something that employees automatically have?
Yes, employees–assuming their employer carries liability insurance–would be automatically covered under the employer’s liability policy for accidents the employee causes in the scope of the employment.
If you are hurt at work you insurance will go after your employers workman’s comp insurance, which is nonexistent. So that is the first problem. Second problem yes, as an employee you would be covered if you caused a situation where someone sued you. However you are not an employee and therefore screwed.
Also, the best employers become nasty when something happens that should have been covered had the employee been an actual employee. Your employer will go after you. Ask me how I know.
That’s legit. Sorry for the stupid question. That makes a lot of sense to me. I’m sorry that happened to you.
The uninsured liability faced by both the employer, and the employee, when workers are not properly classified as an “employee,” should be a legit concern for everyone in this inherently risky sport. People should be motivated by self interest alone to call grooms employees and get WC for them–it’s better on all fronts.
thank you!
Thankfully I came out unscathed. However if you stay with your current employment I suggest a liability policy.
That’s really good advice. Sorry to take up so much time. Is a liability policy expensive?
Ask yourself why your employer would choose one method, which affords you much less protection, over another, which affords you more. These two choices do not apply to your friends with questionable immigration status, unless they are working under false social security numbers, which is a whole different ball of wax.
No clue. After having an employer turn on me, I only worked for places that were above board. The times I could have been considered and independent contractor I didn’t carry any as it was here and there as a favor and it was below the reporting rate.
Can’t help you in the numbers piece. I have liability coverage (for my stables business, me, and my employees) as part of a package policy I get that covers the farm property, equipment, horses, liability, etc. I am not familiar what a true “independent contractor” horse professional would expect to pay in premium to get liability coverage for the work you do in the scope of your employment.
Suppose you are holding your ‘employer’s’ horse at the ring. You pull the cooler off of him and accidentally hit the horse next to you in the eye and that horse requires 10k of surgery. Your employer can say, ‘Geeze, I’m sorry, but Gabby is not my employee, she’s an independent contractor. You’ll have to get the money from her.’
Or any number of scenarios where anyone’s horse is injured, someone is injured, property is damaged, etc and someone has to be to blame.
and simply having personal liability insurance (which you can get very affordably through USEF) isn’t going to make you an independent contractor, because you aren’t one.
yes. That would be awful. I’m trying to look up the liability coverage online. So far what I found is you have to submit info and get a quote back. I can’t find a price upfront
Read upthread. An independent contractor has to fulfill the infamous “20 questions” that basically prove that you are running a business and are not an employee.
https://www.walthall.com/wp-content/…-Checklist.pdf
So, in my instance, I had clients, at least two at a time. They did not tell me how to do my job, they just told me what needed done. I used my supplies and provided my own office. When you only work for one organization and they provide the supplies and all the direction you are an employee.
This is the short version, google it and you will find more than you ever wanted to know. It’s great that you are filing taxes, but that does not relieve you or your"employer" of the duty to classify you correctly. Read the whole thread.
As for liability insurance, I got a million $$ in coverage for about $250 a year about 10 years ago. Contact an insurance agent and they will set you up. But then again, you are an employee under cover as an independent contractor, so I don’t know what their advice would be.
And remember:
https://en.wikipedia.org/wiki/Ignorantia_juris_non_excusat
In general misclassification is much more dangerous in the legal liability department for the employer than the employee, though again in the horse world we have some special circumstances including the possible liability for damaging either the employer’s horse or another horse on the show grounds. Midge’s scenario is pretty reasonable. Now of course you probably don’t have tens or hundreds of thousands of dollars to attach or sue for, which maybe makes it less likely you’d be at risk.
However, independent contractors have substantially fewer protections in other ways also. Obviously you can be fired at any time without notice. Less obviously, your employer can skip out on money owed to you with a lot less recourse to you. If an employer misses a payroll check, you can get free help from your state government to attach their funds until you are paid. If your 1099 vendor is late with a check or skips out entirely, your only option is civil court at significant expense to you. Most people don’t carry workman’s comp for 1099 help and if you read the fine print in your health insurance, they may not be obligated to cover you for a work-related injury. And of course, the taxes that you pay and the money management you have to do to get them paid is also of concern.
When you write about your tips, surely you acknowledge that you are declaring them on your taxes as well.
In some ways I agree with our houseguests that 1099 status can be pretty great for a highly paid worker. It’s certainly much more convenient for someone who wants to employ only a couple of workers and doesn’t want to carry a ton of responsibility for them. Unfortunately, too many people have abused this status which is why it is less available to all of us even when it is convenient and aboveboard.
Although it is less convenient for everyone, probably the best way to give yourself a plausible defense (aside from manning up and engaging a payroll company to give workers the most protection) is to ensure that workers are receiving 1099s from at least two different entities.
She’s got $100K of earning a year to garnish, though, and presumably would like to secure credit at some point in her life…Make no mistake, though, both the “independent contractor” and the barn owner would get sued if the IC (really an employee) causes an accident. And neither will have insurance for it, because barn owner’s insurer would rightly announce they don’t cover “independent contractors” (or won’t provide coverage when there were misrepresentations to it in the underwriting of the policy when it asked about the number of employees and was told there aren’t any)
Again, could someone point me to where the poster in question stated that they don’t pay employment insurance? I went back to the beginning of the thread and scoured it and I can’t find that statement. When I ran a farm I had on PT employee and the occasional incidental employee. Obviously none of them had health insurance through me. I didn’t withhold taxes, either. But I certainly paid employment insurance. I also carried a massive liability policy. Despite that, I ended up having to ask one PT employee to leave for repeatedly bringing a friend with her despite my warning her in writing a few times. I was concerned that I could be held liable for injury or death of the friend as she wasn’t an employee but she was engaging in activities that may not have fallen under the protections offered by the Agrotourism statute.
When I worked in IT (at a government contractor, no less!) , we had a large number of people classified as independent contractors that met none of the criteria above. Similarly, I have been classified as a 1099 at every single place I’ve taught music over my 20 year career. I provide most of my own materials. I “controlled” what hours I worked in the same sense that my current employer has a list of the hours I am available. I sure as hell could not choose not to come in without getting fired. I’m not quite understanding the pearl clutching going on in this thread. This is common practice across virtually every industry in the US.
It is, unfortunately, “common practice” for employers to break the law in this manner. That doesn’t make it right, or legal.
