Recently, a LeadingAge Kansas/KING Member began negotiations with a Temporary Staffing Agency. The Agency considers their staff Independent Contractors and does not provide workers’ compensation coverage. Instead, they require the Contractors to carry Occupational Accident Insurance (OAI). The Agency’s position is that OAI provides an adequate substitution for workers’ compensation.
In Kansas, workers’ compensation is a statutory requirement for all employers with a few exceptions. The employer is responsible for providing workers compensation benefits even if the worker calls themself an independent contractor. In fact, there are tests that have been established by the courts over the years to determine whether an Independent Contractor should be considered an employee for the purpose of awarding workers compensation benefits. Each situation must be looked at individually, but the employer’s right to control a worker’s conduct will increase the risk of workers compensation benefits being awarded. For this reason, we believe it is probable that a Temporary Staff Agency person would be considered an employee if there is a litigated workers’ compensation claim. If so, the employer would be required to cover the work injury and lost wages/disability if no other workers compensation coverage exists.
OAI typically has deductible options and claim limits. Workers’ compensation provides first dollar coverage and has no medical coverage limits. In Kansas, workers’ compensation benefits are specifically defined in statute. We recommend that members contracting with an outside agency for temporary staff or any independent contractor request copies of insurance certificates including workers’ compensation. OAI is not an adequate substitution for workers’ compensation insurance.
