5 Myths of Workers' Compensation
When it comes to workers’ compensation, there are many myths. We took a poll from our staff to gather the common misconceptions about work comp, and have come up with some answers to clear up any and all confusion.
1. Only larger businesses are required to carry workers’ compensation insurance.
The state of Missouri requires employers with five or more employees to carry workers’ compensation insurance. An exception to this is employers in the construction industry, who are required to carry workers’ compensation insurance if they have one or more employees.
2. Part-time employees don’t count.
Regardless of the status of your employees (full or part-time), they are still employees, and must be covered with workers’ compensation insurance if you have five or more employees, or one or more employees if you are in the construction industry.
3. Family members don’t count.
Family members DO count toward the total of employees an employer has. So if an employer has 4 employees, and his wife does the books, she is in fact the fifth employee, and workers’ compensation insurance is required.
4. We only have two employees in Missouri, the rest of them are in other states. We don’t need workers’ compensation.
The physical location of the workers does not change their status as employees that count towards the total of the business. Even if they are physically working in other states, they are employed by a Missouri business which must adhere to Missouri state law regarding workers’ compensation.
5. We give our workers 1099’s so they aren’t employees.
Simply giving an employee a 1099 does not make them an independent contractor. The State of Missouri uses a 20-factor test created by the IRS to determine whether a worker is an employee or an independent contractor. If the worker is in fact an employee, and not an independent contractor, the employer is required to provide workers’ compensation coverage if it employs five or more workers.
For more information about workers’ compensation coverage and insurance, view our website or speak to one of our knowledgeable technicians by calling 800-775-COMP (2667). You can also learn more about properly classifying employees or reporting 1099 fraud by visiting our website, or by calling 573-751-1099. The Department also provides presentations to organizations and employers on this subject.