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Employee-employer relationships regarding workers' compensation are
complicated by the IRS, industrial commissions, the courts and state statute.
Each has its own definition or applies a different test to define "employee."
Prior articles discussed the difference between an independent contractor and an
employee; the responsibility placed on upper tier contractors when lower tier
contractors do not provide workers' compensation benefits for their direct
employees; and the importance of contracts and contractual risk transfer in
managing some of these relationships. This and the following article will re-cap
some previously covered information and apply it to "employment situations"
exempt from the requirement of workers' compensation protection.
Who Is An Employee and How Many Are Required?
Thirty-seven states and the District of Columbia require every employer with one
employee or more to provide workers' compensation coverage. Only 13 states allow
employers to forego coverage until they surpass a certain threshold number of
employees; once eclipsed, it becomes necessary for employers in those states to
provide protection. A few of the "threshold" states lower the threshold number
if the employer falls within a contractor classification.
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