South Carolina Independent Contractors

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The following is a great assessment of how a specific Workers Compensation Commission views independent contractors. Even if your company has no Workers Comp concerns in SC, the control issue is spelled out here very well. The issue of employee vs. subcontractor is very important at the time of your yearly premium audit.

State of South Carolina

Workers’ Compensation Commission

October 6, 2009

Coverage Requirements and Statute References

Employers frequently contact the SC Workers’ Compensation Commission to ask, “Do I need workers’ compensation insurance?” Any employer in South Carolina who regularly has four or more workers full-time or part-time is required to have workers’ compensation insurance.

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However, there are exceptions, as outlined in the SC Code of Laws Section §42-1-360. The exceptions include: agricultural employees; persons engaged in selling agricultural products; casual employees; state and county fair associations; federal employees; railroads and railway express companies, and employers who have a total annual payroll of less than $3,000, regardless of the number of workers employed during that period. Also exempt are owner-operator drivers and certain commission-paid real estate agents, which meet specific threshold requirements.

Employer-employee relationship case law defines the fundamental test of employment relationship as the right of the employer to control details of an employees work. It is not actual control exercised, but whether there exists right and authority to control and direct the particular work or undertaking as to the manner of means of its accomplishment.

The courts have defined regularly employed as meaning employment of the same number of people with some constancy throughout a relevant time period. Employment situations are not always clear. Seasonal employment is a good example. In instances like this a Commissioner, based on the finding of fact, determines whether an employer regularly has four or more employees.

Employment is casual when it is not permanent or periodically regular but occasional or by chance and not a usual course of the employer’s trade or business. Case law provides that if an employee is doing a task within the business, trade, or occupation of his employer, the employee is not casual, even if the duration of employment was brief and isolated. Part time employment is not casual in nature and is not included in the exceptions under Code Section §42-1-360.

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Medicare Set asides May Never Close Out

The Medicare set asides possibly possess no statute of limitations. We have received a large number of questions on my last post. I thought it was best to post the excerpt from the town hall meeting to make sure all of my readers know CMS’s position on MSAs.

Picture of Physician carrying a Piggy Bank Medicare Set-Asides Concept

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The following is a transcript from a Town Hall teleconference. The most important part is in bold. That was a tough place to end the teleconference as the six-year statute of limitations question was being addressed by CMS.

TOWN HALL TELECONFERENCE
SECTION 111 OF THE MEDICARE, MEDICAID & SCHIP EXTENSION ACT OF 2007
42 U.S.C. 1395y(b) (8)

DATE OF CALL: December 15, 2009

SUGGESTED AUDIENCE: Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation Responsible Reporting Entities- Question and Answer Session.

Question: Okay. And is there any – do you have any type of statute of limitations? I was told in a seminar that there’s a six-year statute of limitations. Is that correct? I hadn’t heard that before.

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CMS: This could be another one of those instances where the answer is maybe yes, maybe no depending on what you want to tie to it. Generally, there is a statute of limitations in terms of how long you have to bring a litigation action. But there’s different rules in terms of when it runs from. And generally, anything we have doesn’t start to run until we have knowledge of the claim. And certainly in a liability situation it’s not the date of accident that controls. What we’re looking at is when there was any settlement, judgment, award or other payment. So we would have at least six years from that date.

Question: And after six years then you would no longer pursue recovery?

CMS: That’s not necessarily true. What I said is the six year statute of limitations is generally tied to when we can pursue action in court. But there are other recovery actions that we have that we can take as well.

Moderator: Okay Operator, I’m sorry but we’re going to have to close this call off now. Thank you everybody who was on it. We appreciate your questions. And for those who didn’t – we didn’t get your questions we’re sorry. We’ll be doing this call again – a call like this next month.

Independent Contractors In South Carolina

South Carolina Independent Contractors

Medicare Set asides – Possible No Statute of Limitations

Medicare Set asides May Never Close Out