Yes! It is mandatory to provide a minimum level of workers’ compensation insurance to all employees. Even if you are having trouble meeting bills, don’t let your workers’ compensation insurance payments lapse. You do owe it to your employees, and it is the law. Not paying workers’ compensation constitutes a serious offense, and courts have gone directly into the pockets of corporate officers to make good on employee compensation claims that should have been covered.

The Risks of Going Without Insurance Are Not Worth It

If you have are treating people working for you as independent contractors and they should according to IRS standards be categorized as employees, then you are potentially liable for not paying them workers’ compensation insurance.

You and I both know that many firms of all types intentionally call people independent contractors when in fact they should be categorized as employees. If the IRS challenges and wins, such companies will be forced to pay back taxes plus interest and penalties.

However, the far bigger risk is when these same firms are not paying for workers’ compensation insurance. If one of these people is injured on the job, the potential risk to the employer is huge! You could be held responsible not only for all medical bills but also for lost wages; if the injury is serious enough, it could be a lifetime of lost wages. Plus, there may be criminal liability. Furthermore, do you really want to be exposing people who work for you to not having insurance coverage if they are injured on the job?

I want to urge you, even if you hire people as independent contractors when they should be hired as employees (much as I suggest you don’t do that at all), to at least make sure they are thoroughly insured.