Companies in Michigan are usually required to ensure they offer workers’ compensation for their employees. When companies hire subcontractors, they may wonder if they need to provide workers’ compensation for these workers as well.
According to the Department of Licensing and Regulatory Affairs, subcontractors in Michigan are usually considered to be independent contractors. This means that a subcontractor has a separate business that he or she runs and that this business has been employed by a company. A subcontractor is viewed as an employee, though, if he or she does not run a business with several employees. If a subcontractor is the only owner of his or her business, this person may not always be covered under the state workers’ compensation program.
A company usually provides workers’ compensation for its employees only. Chron.com says that because subcontractors are usually independent contractors instead of employees, a company typically does not need to provide workers’ compensation. Accidents do not occur only when workers’ compensation is available. Because of this, companies may want to mention workers’ compensation when they draw up contracts with subcontractors. In this situation, subcontractors typically need to demonstrate that they have insurance and can provide their employees with workers’ compensation if an accident occurs.
In some circumstances, subcontractors may not need to have workers’ compensation. This is usually the case when a person does not have employees. Most of the time, though, a subcontractor needs to have a certificate of insurance. This certificate should usually explain the coverage periods and amounts, as well as include all of the relevant policy numbers.