Are HOA Communities Using Casual Employees Subject to the Workers Compensation Act?
Some HOA’s use 1099 employees which may be classified as “casual employees.” Casual employees typically are not paid well enough for insurance carriers to write a Workman’s Compensation policy for them. To receive a Workman’s Compensation policy, the homeowner association may have to go to the rate bureau which is very expensive and typically cost prohibitive. Because the Association’s insurance company may not write a Workman’s Compensation policy for less than $100,000 in coverage. This is to protect the insurer from a claim that may cost $50,000 while the employee is paid only $3600.00 per year. So, the question is whether or not casual employees are subject to the Workers Compensation Act at all?
We may define “Casual Employees” as persons whose employment is both casual and not in the course of the trade, business, profession or occupation of the employer, and are not considered subject to the Workers Compensation Act. If an HOA has only one instance of this classification of employee they may neither be subject to, nor protected by, the Workers Compensation Act. Generally speaking, a casual employee may recover for an injury under the General Liability policy, if the cause is by the exclusive negligence of the community association, and if the employee was free from any negligence.
For more information, Cambridge Management Group, LLC always suggest you contact an attorney specializing in Workman’s Compensation law who can provide you with legal advice, the Association’s insurance agent who can provide you with insurance advice, and the HOA’s managing agent who may assist you. It is important for the HOA to properly understand how it is managing its risks to exposures before it becomes a problem.
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DISCLAIMER: The information contained herein is intended for informational and educational purposes only and should not be construed as offering legal advice or insurance advice. For legal advice, seek the counsel of a competent attorney specializing in Community Association Law on matters pertaining to your state and community. For insurance advice, seek the advice of a licensed insurance agent in your state.
For more information visit our web page at www.CambridgeHOAPropertyManagement.com or contact us at: Support@CambridgeHOAPropertyManagement or by calling us at 704-874-1820 or 844.612.1515.
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