How Can I Avoid Workers Compensation Coverage for My Drivers?
Under the New Hampshire Workers' Compensation Law RSA 281-A:5, every employer who has any employees, full or part-time, is required to cover these employees with workers' compensation insurance written by a carrier. It does not matter if they are related, such as daughter, son, husband, etc. It also does not matter if the business is a "Non-Profit" organization. The only business exempt from the requirement to purchase workers’ compensation coverage are sole proprietorships (self-employed persons) and corporations which have only three corporate officers and no employees other than these three officers.
There is often confusion about the respective responsibilities of employers and subcontractors in providing workers’ compensation coverage for workers. If you use subcontractors in your business, make sure that any subcontractors you use have arranged to provide required workers’ compensation coverage for their employees. Otherwise, you may be held liable to the compensation of any injuries that occur to the subcontractor’s employees.
RSA 281-A:2 VIII explains that if a corporation or limited liability company (LLC) has 3 or less executive officers or LLC members and no other employees, coverage is not mandatory but may be elected pursuant to RSA 281-A:3. Once there is a 4th executive officer or LLC members, workers' compensation insurance must be obtained. Once coverage is in place, all persons, including all officers or LLC members, are considered employees and would automatically be covered. Up to three executive officers or LLC members may then elect to be excluded per RSA 281-A:18a. Professional Associations are to be treated the same as corporations and LLC.
An independent contractor must meet the criteria defined in RSA 281-A:2 VI. This includes possession of a federal employer identification number, having control over the performance of the work and the time the work is performed. An independent contractor is not required to work exclusively for one employer.
Please see the text of RSA 281-A:2 VI at the following link: