Texas Agreement Between General Contractor And Subcontractor To Establish Independent Relationship

The second implication may not be as well received as the first. In accordance with the same provisions of the independent contractor which served as the basis for that decision, a policyholder hiring a contractor without staff is treated as the contractor`s employer. This means that the contractor`s labour cost can be recovered as part of the employer`s pay slip to determine the workers` compensation premium. The employer and the contractor may enter into an agreement (DWC Form-81) to indicate whether the policyholder will withhold the costs of coverage from the contract price. The law requires the use of forms developed by the Division of Workers` Compensation (DWC) to clearly establish these relationships and confirm the intention of the parties when they have agreed that the general contractor will compensate the subcontractor and the subcontractor`s staff. If such an agreement exists, the law considers the subcontractor and the subcontractor`s personnel to be an employee of the general contractor within the meaning of the Workers` Compensation Act. And this means that workers` comp benefits offer the exclusive remedy for an employee`s violations in the workplace, without the right to sue the general contractor for negligence in the cause of those violations. There are three categories of independent contractor relationships covered by the law: Form DWC-83 can be used to verify the independent relationship and clarify the intentions of the parties. The form must be submitted to DWC and the insurer within ten days from the date of execution. The mandated contractor shall keep the original. This agreement stipulates that the subcontractor meets the definition of an independent contractor and is not an employee of the hiring contractor. This category applies only to contractors who work on the following persons: in addition, the law clearly states that an insurance company is prohibited from charging a premium without the agreement of the parties to an employer who bears a work allowance to cover an independent contractor or the staff of an independent contractor. This is not a bad idea, even if the independent contractor has a work allowance..

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