Independent Contractors Guidance



General Predetermination Q&A:

Q:  Does this Predetermination form apply to unemployment as well as workers’ compensation?

A:  No.  It only applies to Maine workers’ compensation.  Federal law prohibits an unemployment predetermination.  However, if you have answered the questions consistent with your actual relationship, you should not have any problems with the Maine Department of Labor.

Q:   I have a Predetermination form in the old format (prior to January 1, 2013) that doesn’t expire until later in 2013.  Do I need to submit a new application on the new form prior to its expiration?

A:   No.  Submit a new application on the new WCB-266 form when the current one expires in 2013.

Q:  As an employing unit, am I correct to believe that once I have an approved application my company is 100% protected from any liability in regards to that independent contractor?

A:  Not necessarily.  An approved application creates a rebuttable presumption, which means it may be successfully challenged in the future.

Q:   If this form doesn’t guarantee my company’s protection, then why bother having the independent contractor fill it out?

A:  An approved predetermination, submitted with information consistent with the actual relationship between an employing unit and an independent contractor, is persuasive proof of an independent relationship.  Further evidence of independence would be to produce proof of workers’ comp. insurance for the independent contractor.  Also, many insurers may charge the employing unit premiums on independent contractors if there is not sufficient verification that they are not employees.

Q:  Can the independent contractor use an approved predetermination to work for other employing units?

A:   Yes, as long as the facts are consistent given both relationships. It is strongly suggested that employing units who accept previously-approved forms get a copy of the entire application so that they are sure the facts are consistent with the work the independent contractor will perform for them.

Q:  When I answer some of the questions on the form, they ask for a ‘yes’ or ‘no’ answer, but I want to explain my answer.  Is that allowed?

A:  Yes.  The Workers’ Comp. Board encourages applicants to write in more details on the form if you don’t feel a ‘yes’ or ‘no’ answer is sufficient.

Individual Question Guidance:

Section I:

Question 1(b) – given that the trucking industry typically needs loads delivered from Point A to Point B and needs it delivered to its destination by a certain time, does the owner/operator have the right to choose the route(s) they want to take?

Question 3 – the question isn’t asking IF you make a profit, but CAN you make a profit.  If the owner/operator experiences some unforeseen circumstances (such as blowing their engine, needing a wrecker, having a flat tire, etc.) then that load may not be profitable.

Question 5 – while an independent contractor may not currently make their services available to others (such as is the case with owner/operators who use the operating authority of another carrier) the question is asking what you would do if you stopped working for your current customer.  If your answer is to advertise and/or market your services to others to get work, then you should be all set answering this question.

Section II:

Question 8 – the term “money damages” is a term that can confuse some people.  What the WCB wants to know is whether the independent contractor can be sued for not getting the job done within the terms of the agreement and can they sue the employing unit if the employing unit decides to end the relationship before the agreement allows.

Question 9 – verbal contracts are perfectly fine since it is not reasonable to require a written contract in every situation as this would frequently hinder commerce.

Question 10 – an independent contractor is not prohibited from being paid by the hour, however, it is prudent to explain that it is at a rate higher than what employees are paid to include overhead such as equipment, fuel, insurances, etc. in the rate.  Lawyers are the best example of independent contractors who get paid by the hour.