Reporting Workers Considered Casual Labor
For certain industries, particularly construction, it’s a common practice to hire workers that are not paid through regular payroll, often referred to as casual labor. These individuals work just like bona fide employees except for not being on the payroll. See below to learn how to account for them during your payroll verification:
Implicit Employer-Employee Relationship
With casual labor there is an implicit employer-employee relationship, but without formal documentation. Payments made to such workers are generally chargeable in determining your premium since these individuals generally do not carry workers’ compensation coverage themselves. If these workers can produce proof of coverage, they may be omitted from the payroll verification process and not factored into your policy.
1099 Forms and Workers’ Comp
Policyholders are responsible to cover a worker who receives a 1099 Form if the business relationship between the policyholder and worker mimics that of an employer and employee. This relationship, whether contractual or otherwise, would establish that the worker is not a bona fide business and the work performed is related to the core operations of the hiring entity.
Obtaining Certificates of Insurance
The best way to verify that casual labor or 1099 workers are covered by workers’ compensation insurance is to obtain a Certificate of Insurance from them. These certificates should then be presented to NYSIF during the payroll verification process as proof of coverage.