Workers Compensation is an Exclusive Remedy, which is a legal term that means it is the only possible way for an injured worker to receive compensation. They cannot bring a lawsuit against the entity who is paying them that falls outside of workers compensation law. Since this is the only way that injured workers can be compensated, the laws in virtually every state are designed to protect those workers. While some of the rules and requirements may not seem fair to the employer, the system does not have any other way of helping laborers who get hurt on the job. As with many well-intentioned public policies, the practical application doesn’t affect everyone equally. Our job is to help you protect your business from the workers comp risks you didn’t even know you had. Whether you use traditional employees, temporary or casual labor, or subcontractors, you need to be aware of your exposures and how a workers comp claim can affect your business. If you pay laborers of any kind- it is a safe bet to assume that you are legally responsible for their safety, regardless of any written agreement you may have. Many people don’t realize there is often a “statutory employee” relationship established- even if the person isn’t an actual employee. Workers Compensation is the policy that protects you from financial losses as the result of injuries to workers that meet any of these descriptions. Even if you aren’t responsible, and a subcontractor has their own policy, attorneys may still attempt to include you in an injury lawsuit, and your workers compensation policy can defend you against frivolous claims so it does not cost you money out of pocket. The North Carolina Industrial Commission specifically states that referring to laborers as subcontractors and issuing 1099s for tax purposes does not prevent them from being counted as an employee for workers compensation purposes, so anyone who hires labor in North Carolina would be wise to carry workers comp for their own protection- even if not required by law. While every state is a little different, this would certainly be a good rule of thumb for anyone who is concerned about protecting their business from injury claims by either employees or subcontractors.