January 2011 Dec Page

Question of the Month

In order to protect employees of small operations, the workers compensation laws of a majority of states may impose liability on principals for compensation benefits to employees of contractors or subcontractors. These statutes vary from state to state but usually are qualified by a provision imposing liability on the principal only in the absence of workers compensation insurance provided by the contractor or subcontractor.

Since there are as many variations as there are laws, questions may arise as to the operation and objectives of workers compensation statutes regarding the potential liability of principals or contractors to employees of contractors or subcontractors. First and foremost, what is the status of the injured worker? Is he an independent contractor or an employee? Then, are there instances when a principal is liable for workers compensation benefits to employees of contractors or subcontractors even when the actual employer has coverage? Is a homeowner considered a principal that may be liable for workers comp benefits? If a principal has to pay benefits, is there a right of subrogation against the person primarily liable? If a contractor sublets work in states other than his home state and a worker is injured, which state law controls the payment process?

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