Seasonal workers often contribute to business success, but they also impact your business in many unexpected ways. If you rely on seasonal workers, consider these factors to protect your business and your workers.
Workers’ Compensation Compliance
In Rhode Island, most businesses are subject to the Workers’ Compensation Act, however some exemptions exist.
Employers hiring people in domestic service and some real estate jobs may not need to buy workers’ compensation insurance. Agricultural employers are exempt if they employ less than twenty-five farm laborers or agricultural employees for thirteen consecutive weeks. Sole proprietors and partners are also exempt from purchasing coverage for themselves but they are still required to purchase workers’ comp for their employees.
Don’t assume that a seasonal worker does not require workers’ compensation insurance, though. Failure to carry proper insurance coverage can lead to fines, penalties, a lawsuit, and personal liability. Fines can range between $500 and $1,000 per day of noncompliance.
Additionally, the business and its officers are responsible for any work-related claims if a worker injures themselves. The Director of the Department of Labor and Training can also suspend business operation.
Worker Misclassification Leads To Stiff Fines
Rhode Island has a specific taskforce for searching out offenders and a method to report employers anonymously. The State continues to crack down on employers for intentional employee misclassification to reduce their expenses. Misclassification fines are often in the tens of thousands of dollars.
Unfortunately, worker misclassification isn’t always intentional, but it still carries heavy penalties. Employers pay between $500 and $3,000 for each misclassified employee for a first offense, and up to $5,000 for each employee for any subsequent offense.
Rhode Island Contractors
Rhode Island law extinguishes employer responsibility for independent contractors after they file a form DWC-11-IC. The contractor is responsible for his own workers’ compensation insurance coverage until they withdraw their form with the Department of Labor and Training.
The Department of Labor and Training offers a website to check contractor status. If a person does not appear in the search, they’re an employee and the employer must comply with the Workers’ Compensation Act.
Affordable Care Act & Seasonal Workers
Normally, the Affordable Care Act includes your seasonal worker count with other employees to determine whether you’re an Applicable Large Employer of 50 or more people required to supply health benefits.
However, when you employee over 50 full-time employees, but the number exceeding 50 is due to seasonal workers, your business does not have to supply health benefits.
The Act defines a seasonal worker as an employee that works no more than 120 days, or four months during the previous year and does not work more than 130 hours per month for four months during the current calendar year. If they work more than this, they’re employees entitled to health benefits.
Complying with workers’ compensation regulations is often very complicated, but we’re here to help. We’ll also review your other business insurance policies to ensure your business is well-protected.