Many nonprofits and social service organizations use independent contractors for certain elements of their operations.  Unfortunately the term “Independent Contractor” has different meanings to different people.  For example, the way they are treated for tax purposes is different than they way they are treated for Workers’ Comp. purposes. 

Many nonprofits run into problems with their Workers’ Comp. at audit time.  Workers’ Comp. companies are very strict when it comes to who is an employee and which people are required to be included in the annual payroll.  It’s helpful to know up front how these independent contractors will be classified.    Here are 4 criteria for a “down and dirty” assessment:

1)      Do they have a local business license?

2)      May he/she bring an assistant without prior approval?

3)      Do they have their own insurance coverage?

4)      Does he/she furnish their own materials or tools for their job?

For a complete independent Contractor Checklist please contact SteelBridge Insurance Services at 800-900-1068.  Or click here to visit our website for Social Service and Nonprofit Insurance.