Workers Compensation Insurance for Independent Contractors and their Employers

Massachusetts requires every employer in the commonwealth with one or more employees to have a valid worker’s compensation policy at all times. This type of no fault insurance protects employees by providing medical care and partial wage reimbursement. Employers need not have a valid worker’s compensation policy for work done by an independent contractor as they fall outside the definition of employee. When an employee for an independent contractor is injured on the job, they may be shocked to find out that their immediate employer does not have sufficient or any coverage.

Nonetheless, the employee may still be protected. The Massachusetts Workers’ Compensation Act requires an employer who hires an independent contract to provide workers compensation coverage to the employees of the uninsured independent contractor if the employer would be obligated to pay compensation to his own employees. This provision extends the protections to employees of an uninsured independent contractor and mimics the protections an employer must furnish to it’s own employees.

Employers must be careful when subcontracting work to independent contractors to not circumvent the workers compensation act. Hiring an independent contractor doesn’t necessarily absolve the employer from its obligations under the act. Employers must also be careful to not improperly classify legitimate employees as independent contracts and find themselves mistakenly without workers compensation insurance.



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