For some of you, being exempt in regards to Oklahoma Workers Compensation isn’t a big deal…but there’s a special group of people (here’s looking at you my lovely contractors and subcontractors) that this is going to be the best news that they hear all day!
The affidavit for workers compensation is back and live as of August 2 in the state of Oklahoma!
This is a big deal! Why you might ask?
Prior to the affidavit, did you know that if you as a contractor hired a subcontractor (AKA a sub,) under workers compensation you could be held liable if they were injured on the job? It’s true.
If your subcontractor failed to have their own workers compensation policy or let their policy lapse the contractor could be liable for them if they were injured.
Why might you ask?
The Work Comp Commission had to figure out a way to designate who was an actual employee and who was an actual sub so people didn’t take advantage of the system.
In layman’s terms, it came down to if a sub didn’t have workers compensation, congrats are in order! You have an employee. If they did, then they were a sub.
On top of that, if the subcontractor didn’t have workers compensation there were times that the workers compensation insurance company would view the sub as an employee and charge the contractor an additional premium based on the payroll for the sub.
This in turn caused contractor businesses to protect themselves which makes absolute sense! A contractor doesn’t want to take on all of the subs ailments. They’d do this by requiring ANY and ALL subcontractors to have a work comp policy - even if it was just a one man show. While these policies were fairly inexpensive with Compsource Oklahoma’s minimum policy falling around $500, that’s still an added expense. Now everything has changed. The Affidavit of Exempt Status will fix a couple of these issues.
Now, if you hire a sub and they don’t have a workers compensation policy there is an option to have them sign this form. This form shows that the subcontractor waives the contractor of responsibility and affirms that they are not an employee.
Keep in mind that a contractor can still require a subcontractor to have a work comp policy despite the affidavit being released. That is to their discretion so it’s always important to ask before beginning a job.
You can go to https://ok.gov/wcc/ and follow the directions to find and submit the affidavit online.
The system will ask you a list of questions to help people understand who qualifies as a subcontractor and who doesn’t. Once you answer the questions and fill in personal information including your business name, first name, last name, Federal Tax ID number, and a few other items you can submit it all online. There is a $50 filing fee.
If you have questions regarding your insurance, ECI is always here. Contact us for an Oklahoma workers compensation insurance quote.