Risk-Sharing
2015. HB1105 is titled “An Act to provide for an affidavit creating a rebuttable presumption that a person is not an employee for purposes of workers’ compensation…” Following is a basic overview of what this means and how it may affect you.
Work Comp Affidavit for Independent Contractors Effective 7/1/2015 Many cities have projects that small contractors would like to bid but have been unable to do so. These smaller contractors were not previously eligible to bid on these projects as they did not carry Workers’ Compensation coverage. SD law allows sole proprietors to opt out of the requirement to carry this coverage. Many cities required the contractor to carry this coverage in order to protect the city in the event the contractor may be injured while completing the work. The 2015 SD Legislature passed a new law to help alleviate this issue. The law will go into effect July 1,
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If you hire someone who is a sole proprietor as an “independent contractor” to do work for your city, and they do not carry workers’ compensation insurance, you can ask them to sign an affidavit which would protect the city from a work comp claim if this individual is injured while working on a city project. Three criteria must be met: 1) They are an independent contractor, not an employee; 2) They are a sole proprietor and 3) They do not have any employees and therefore are not required by law to have work comp insurance. This law applies only to work related injuries and workers’ compensation coverage. All other insurance coverage would still be required. Prior to beginning work on the project specified in the affidavit, the affidavit will need to be signed by both the city and the independent contractor. The contractor will need to verify that there are no employees, that the contractor is not required to carry workers’ compensation coverage, and that the contractor meets the criteria as stated in the Exempt Status Fact Sheet. The city and the contractor will retain copies of the affidavit, as you do with all other insurance certificates.
SOUTH DAKOTA MUNICIPALITIES
