Missouri Department of Labor and Industrial Relations

When it comes to workers’ compensation, there are many myths. We took a poll from our staff to gather the common misconceptions about work comp, and have come up with some answers to clear up any and all confusion.

1. Only larger businesses are required to carry workers’ compensation insurance.

The state of Missouri requires employers with five or more employees to carry workers’ compensation insurance. An exception to this is employers in the construction industry, who are required to carry workers’ compensation insurance if they have one or more employees.

2. Part-time employees don’t count.

Regardless of the status of your employees (full or part-time), they are still employees, and must be covered with workers’ compensation insurance if you have five or more employees, or one or more employees if you are in the construction industry.

3. Family members don’t count.

Family members DO count toward the total of employees an employer has. So if an employer has 4 employees, and his wife does the books, she is in fact the fifth employee, and workers’ compensation insurance is required.

4. We only have two employees in Missouri, the rest of them are in other states. We don’t need workers’ compensation.

The physical location of the workers does not change their status as employees that count towards the total of the business. Even if they are physically working in other states, they are employed by a Missouri business which must adhere to Missouri state law regarding workers’ compensation.

5. We give our workers 1099’s so they aren’t employees.

Simply giving an employee a 1099 does not make them an independent contractor. The State of Missouri uses a 20-factor test created by the IRS to determine whether a worker is an employee or an independent contractor. If the worker is in fact an employee, and not an independent contractor, the employer is required to provide workers’ compensation coverage if it employs five or more workers.

For more information about workers’ compensation coverage and insurance, view our website or speak to one of our knowledgeable technicians by calling 800-775-COMP (2667). You can also learn more about properly classifying employees or reporting 1099 fraud by visiting our website, or by calling 573-751-1099. The Department also provides presentations to organizations and employers on this subject.

The Missouri Workers’ Safety Program (MWSP) was created to help employers improve workplace safety, reduce workers’ compensation premium costs, and regulate safety services provided by insurance carries. All insurance carriers writing workers’ compensation insurance in Missouri are required by law to provide comprehensive safety engineering and management services to employers upon request.

The MWSP certifies and maintains a registry of safety consultants and engineers for employers and insurers to utilize, monitors the impact of safety services provided by the insurance carriers, performs on-site safety audits and consultations, and conducts occupational safety education and training. MWSP also assists employers in implementing a comprehensive safety and health program, as well as works with employers to make sure they have appropriate workers’ compensation insurance.

“We have some of the best safety consultants available on our team, and we offer this service to employers at no charge,” said Division of Workers’ Compensation Director, Brian May. “This helps create a safer work environment, which can reduce injuries and increase productivity.”

For more information about the MWSP, visit their website or call 573-522-SAFE (7233).

When it comes to workers’ compensation insurance, an employer has several options. Many employers purchase insurance from an insurance carrier, just like they would purchase home, auto or other liability insurance. This is generally done by purchasing a policy from an insurance agent, who writes the policy through an insurance company the agent represents. 

Another option is self-insurance, either individual or through a group trust. An employer or a group of employers may apply to the Division of Workers’ Compensation (DWC) to self-insure their workers’ compensation obligations. DWC’s Insurance Unit functions as the underwriter, regulator, and auditor for the self-insurance program. An employer wishing to self-insure must have the financial capability to self-insure. The entire financial stability of the company will be directly impacted if an employer is unable to meet the financial obligations of a work-related injury. The potential advantage of self-insurance is reduced costs.

DWC’s Insurance Unit is available to help employers who make the choice to self-insure. More information about individual self-insurance and about group trust self-insurance is available on the Department’s website. To contact the Insurance Unit, call 573-526-3692.