Why Workers’ Comp Matters, Even for Startups
If you’re a new business owner or startup founder, you likely have a lot on your plate. As exciting as it is to start a company you’re proud of, it also comes with huge responsibilities. One of the most important yet overlooked pieces to starting a business is getting workers’ compensation coverage.
Workers’ compensation insurance is an essential part of any company, no matter how many employees you have. Some small business owners may feel they don’t need coverage right away based on the size of their company or the type of work they do. Workers’ comp, however, is legally required in most states as soon as you hire your first employee.
Not only does workers’ comp insurance protect your employees in the event they get injured on the job, but it also serves as financial protection for your business if an accident occurs. This coverage helps your employees pay for medical expenses, rehabilitation costs, and lost wages if they get hurt at work. As a new startup, workers’ compensation helps you avoid major risks during the most vulnerable phase of your business. It also shows potential employees and investors that you’re serious about running a trusted and well-managed business.
Let’s take a look at what startups need to know when it comes to workers’ comp requirements, common mistakes new employees might make, and how OCMI Workers Comp simplifies the setup and compliance for startups.
What Startups Need to Know About Workers’ Comp Requirements
Workers’ compensation requirements vary state-to-state and are regularly evolving. Non-compliance with these regulations could mean facing hefty penalties, which can be detrimental to a startup. As a new company, it’s crucial to understand what’s required specifically in your area and for your industry in order to keep your workers covered and avoid owing steep fines.
It’s important to note that most states require coverage as soon as you hire your first employee—whether they’re part-time, full-time, or even a family member. Some states do have exceptions for sole proprietors or partners, but if someone is considered an employee, they likely have to be covered. Additionally, contractors or freelancers may also need to be covered, depending on how your state defines what’s considered an employee.
Common Mistakes New Employers Make
As the founder of a startup, you may be wearing multiple hats within your organization. It can be incredibly challenging to keep up with ever-changing rules and regulations specific to your state. Keep these common workers’ compensation mistakes in mind while you’re launching your startup.
1. Misclassifying Employees
Proper classification is imperative when it comes to workers’ compensation coverage. Understanding whether your workers are considered part-time, full-time, or seasonal employees, or independent contractors is necessary for maintaining compliance.
2. Delaying Coverage
Delaying coverage until after workers begin isn’t uncommon for startups, but it does often violate the law. Coverage needs to be in place immediately for employees.
3. Underestimating Payroll
Workers’ comp premiums take many things into account—from your claims history and the industry you’re in, to payroll itself. As a startup, it’s important to accurately report your payroll to help avoid audits and potential bills later.
4. Not Including Remote Workers
Even remote workers need to be considered when it comes to workers’ compensation insurance. Just because they aren’t in a physical office doesn’t necessarily mean you aren’t legally obligated to cover them.
How OCMI Workers Comp Simplifies Setup and Compliance for Startups
For new business owners, wearing so many different hats within your company can feel overwhelming. Figuring out how to set up workers’ compensation insurance that’s compliant with state and federal laws can be even more daunting. OCMI Workers Comp helps simplify the process and ensure compliance for startups.
1. Pay-As-You-Go Plans
Unlike traditional workers’ compensation options, there are no minimum payroll requirements when you work with OCMI. OCMI’s pay-as-you-go programs means you’ll get the coverage you need when you need it, without overpaying. Whether you have one employee or one hundred, OCMI is here to offer affordable options that fit your unique needs as a new startup.
2. Claims Management
OCMI’s team of experts offer claims management from start to finish. They can help implement safety training programs to help prevent potential accidents from happening in the first place. In the event someone does get injured on the job, OCMI will assist through the entire process.
3. Expert Compliance Support
State-specific laws can be incredibly complicated. OCMI’s team can help you understand these requirements and ensure you’re never operating out of compliance.
Launch Your Business Confidently with Workers’ Comp from OCMI
Starting a business is exciting, but it can also be overwhelming. In the midst of the complexity, workers’ compensation coverage should be simple and straightforward. When you work with OCMI Workers’ Comp, you can rest assured that your startup is protected, compliant, and ready to thrive. Reach out to the team of experts at OCMI today for a quick and easy quote!
