If your company brings in workers from temporary staffing agencies or subcontractors (or is planning to), you need to know about alternate employer endorsements. They can protect you from costly lawsuits if a temporary employee is injured on the job or gets a work-related illness.
If you plan to bring in people to work for you from other companies, you probably need to look into this. For example, you may get employees from a temporary employment agency to meet your staffing needs during a particularly busy time or if you find yourself suddenly short-staffed. If you’re a contractor, you may bring in subcontractors to work on a project.
How does alternate employer coverage work?
Say that you’re bringing in an employee to help during a particularly busy time. You can require that employee’s primary employer to list your company on their workers’ comp policy’s endorsement schedule. This covers the employee under that company’s policy while they’re working for you.
Although the worker’s primary employer and their workers’ comp insurance provider are responsible for covering their work-related injury or illness, the alternate employer has some obligations. For example, if a temporary employee is injured, you need to report it. You’ll also need to provide documentation and other information as requested.
Note that if the workers’ comp insurer cancels the policy for some reason, they’re not obligated to notify any alternate employers. Therefore, it’s essential to make sure that any employees you bring in on a temporary basis are insured under a valid insurance policy that’s in force.
If you run in to any issues with a claim for a worker who was supposed to be covered under their employer’s policy or if the worker didn’t have coverage as an alternate employer, it’s wise to seek experienced legal guidance.