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Workers Comp – Is my Helper Really an Employee?

workers-comp-insurance

Here at Cover Cannabis we are asked 100’s of questions every month about how to properly insure a cannabis operation. Here is a question we got from one of our customers:

Jeremy (Business Owner): I’m doing everything possible to make my business compliant. I have a helper who comes by a few times per week to help me tend to the garden. I pay him a few bucks for his time and usually give him a piece of the harvest as a bonus. Do I need to have workers comp insurance?

Theresa (Cover Cannabis Agent): Jeremy, we get this question all the time across many different industries.  What you need to know is not having workers comp is extremely punitive. Employers caught without comp, face big fines and the risk of having their doors closed. The laws are designed to keep the work environment safe and protect the common worker. The state is likely to land on the side of the worker if a dispute comes up.

These questions are published by the CA EDD to help you determine if your “helper” is really an employee.  What it really comes down to is, who has the right of control?

  1. Do you instruct or supervise the person while they are working?
  2. Can the worker quit or be discharged at any time?
  3. Is the work being performed as part of your regular business?

If the answer to these questions is yes, the worker is likely an employee.

  1. Does the worker have a separately established business?
  2. Is the worker free to make business decisions which affect his or her ability to profit from the work?
  3. Does the individual have a substantial investment in their job which would subject him or her to a financial risk of loss?

If the answer to these questions is no, the worker is likely an employee.

If you’re unsure, speak with a good labor attorney and give us a call.  As more insurance carriers enter the cannabis space, rates are becoming more competitive than ever. Call us today and let’s explore your options.