Q: How do I comply with Pennsylvania's Workers' Compensation Act?
People have many questions about how to comply with the Pennsylvania workers’ compensation laws. The Pennsylvania Department of Labor and Industry can help answer these questions by your going to its website. However, below are some of the more common and frequent questions people have with regards to just complying with Pennsylvania’s workers’ compensation act.
Q. Is a subcontractor required to carry workers’ compensation insurance if he/she is a sole proprietor?
A. Sole proprietors with no employees are not required to carry workers’ compensation insurance. However, detailed information must be provided to your insurer to prove that the individual is a true independent contractor. If your insurer determines that the sole proprietor is your employee, you will be charged for his/her payroll as per the appropriate classes on your policy. It is your responsibility to provide your insurer with all appropriate documentation to resolve their employment status.
Q. As owner of a trucking operation, must I show proof of workers’ compensation insurance if I use owner/operator drivers?
A. If an insured utilizes owner/operators and is part of a trucking operation, proof of workers’ compensation insurance coverage may be required. For those drivers deemed to be employees, your insurer will need proof of workers’ compensation insurance coverage. Otherwise, that part of the total remuneration that is wages will be included in the premium calculation. If payroll cannot be obtained, then 1/3 of the contract price will be considered payroll for premium calculation purposes.
Q. Do members of limited liability companies (LLC) have an obligation to ensure workers’ compensation liability on their members?
A. Section 301(a) of the Workers’ Compensation Act (Act), 77 P.S. Section 431, only requires employers to maintain workers’ compensation coverage of their employees. Section 104 of the Act, 77 P.S. Section 22, states that the “employee” as used in the Act is synonymous with servant and includes “[a]ll natural persons who perform services for another for a valuable consideration, exclusive of persons whose employment is casual in character and not in the regular course of the business of the employer…” To the extent that LLCs have no employees, i.e., its only workers are partners, it has no employees and, thus, no workers’ compensation liability. However, should a partner withdraw from the partnership and become an employee or the business adds a part-time or a full-time employee, it would then be required to insure its workers’ compensation liability.
Q. Do family members and minors have to be covered by workers’ compensation insurance?
A. Pennsylvania state law does require you to cover any employee, regardless of the number of hours worked per week or whether the person is your spouse or child. The Pennsylvania Workers’ Compensation Act can be viewed in its entirety on our website at www.dli.state.pa.us or can be obtained in hard copy from the State Bookstore of Pennsylvania, Commonwealth Keystone Building, Plaza Level, 400 North Street, Harrisburg, PA 17120, telephone number (717) 787-5109. You may want to look specifically at Sections 103, 104, 301 and 305(a).