New Maine Law Requires Policyholders to Submit New Predetermination of Independent Contractor Status Forms, Effective January 1, 2010; Similar to New Hampshire Law.

This law states "a person performing construction work on a construction site for a hiring agent is presumed to be the employee of the hiring agent for the purposes of this Act, unless:

A.  The person is a construction subcontractor; or

B.  The person owns and operates an item of equipment weighing more than 7,000 pounds and is hired by the hiring agent to operate the equipment on the construction site or to use the equipment to transport materials to or from the site."  This paragraph further clarifies that ownership includes leasing, if not leased from the hiring agent, or an affiliate of the hiring agent.  It also states that a truck with a gross vehicle weight greater than 7,000 pounds qualifies as equipment hereunder.

The law defines a construction site as "a location where a structure that is attached or will be attached to real property is constructed, altered or remodeled".  There is debate currently going on about whether or not bridges and dams fall within this definition.  It is clear this part of the law does not pertain to construction locations without any structure involved.

The law introduces a new definition used to determine construction subcontractor status.  This definition requires a person to satisfy all twelve (12) criteria stated in the law in order to qualify as a subcontractor; hence, the presumption they are an employee of the hiring agent is negated.

The Maine Workers Compensation Board has introduced the Rebuttable Presumption for WCB-263 (11/09) to be submitted to them whenever there is a question, or doubt about the relationship between a hiring agent and subcontractor.

Insurance companies writing workers compensation policies in Maine for the hiring agent can collect a premium from the hiring agent if the "subcontractor" does not clearly meet the law's definition of construction subcontractor.  The subcontractor can complete the Rebuttable Presumption form and obtain a ruling from the Workers Compensation Board.  The board's decision is binding in law, unlike the previous eight (8) point test in Maine's law.

Based upon our research and discussions with several insurance companies, we offer the following examples:

A.  General Contractor hires a sole proprietor or partnership (with no employees) subcontractor.  Sole Proprietor/Partners do not have a workers compensation policy in force.  We recommend the sole proprietor/partners complete the Rebuttable Presumption form, and ask for a ruling from the Workers Compensation Board.  Unless the current status changes, this form will need to be completed for each separate relationship with a hiring agent for work performed on a construction site.

B.  General Contractor hires a subcontractor that is a corporation with no employees, and the owner(s) waive their access o workers compensation benefits; hence, have no workers compensation policy in force.  We recommend the subcontractor complete the Rebuttable Presumption form, and ask for a ruling from the workers compensation board.  Unless the current status changes, this form will need to be completed for each separate relationship with a hiring agent for work performed on a construction site.

C.  General Contractor hires a sole proprietor, partnership or corporation subcontractor with employees, and there is a workers compensation policy in force protecting all employees and all owners/officers.  There should be no need to complete the Rebuttable Presumption form if the relationship clearly passes all of the twelve point criteria in the law.

D.  General contractor hires a sole proprietor, partnership or corporation subcontractor, and there is a workers compensation policy in place protecting employees, but not the owner(s), because they decided to opt out of coverage on themselves.  If the subcontractor clearly passes the twelve point criteria in the law, they should not need to complete the Rebuttable Presumption form.

If a general or subcontractor is confident their relationship is not as an employee employer, but there may be some gray areas relative to passing the twelve point criteria, then we suggest you contact us so we can present the situation to your insurance carrier to obtain their view and agree on a strategy.

One possible way to avoid the need to complete the Rebuttable Presumption form is to purchase a workers compensation policy that provides coverage to all employees and owners.

As always, please call your Clark Insurance agent with any questions you may have. 

Click here for the Maine "Application for Predetermination of Construction Subcontractor to Establish a Rebuttable Presumption" form.

Maine requirements are similar to New Hampshire, which requires policyholders to submit a "Questionnaire for Determining Independt Subcontractor Status Under RSA 282-A:9, III (a)(b)(c)".

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