Workers Comp When You Hire

Workers compensation is a bargain: the injured person gives up the right to sue you, and in exchange you pay whatever the schedule says regardless of fault. Fail to buy the insurance and you lose your half of it.

For a guide who hires, there is a complication before that even arises. A person working on a boat may not be a workers compensation employee at all, and the category they fall into decides which system applies and which policy responds. Getting that wrong is not a coverage gap in the ordinary sense, where a claim is reduced. It is a claim landing in a system your insurance was never written for. Everything below is traced to enacted federal text and to the agency that administers it; state schemes differ and none is described here. The running the business hub carries the rest of this ground.

What does the exclusive remedy actually mean?

That the compensation is all they get, provided you secured it.

Section 905(a) of Title 33 makes the employer's liability exclusive and in place of all other liability to the employee, their representative, spouse, parents, dependents, next of kin and anyone otherwise entitled to recover damages at law or in admiralty.

Then comes the condition. If an employer fails to secure payment of compensation as required, the injured employee may elect to claim compensation under the chapter or to maintain an action at law or in admiralty for damages.

In that action the defendant may not plead that the injury was caused by the negligence of a fellow servant, that the employee assumed the risk of the employment, or that the injury was due to the employee's own contributory negligence.

That is not a penalty bolted on afterwards. It is the removal of the three defences an untrained observer would assume were available, in the one situation where you most need them.

Section 905 appears in full at the Law Revision Counsel's current release of the Code.

Before any of that bites, there is a question about whether the person counts as an employee to begin with, and the classification piece takes it up.

Bucks & Bones, HI

Why might a guide not be covered by the Longshore Act?

There is an exclusion that appears to fit, and it comes with a condition attached.

Section 902(3) defines employee as any person engaged in maritime employment, then removes a list of categories from that definition.

One of them, at clause (B), is individuals employed by a club, camp, recreational operation, restaurant, museum or retail outlet, which is the clause a guiding business would look at first.

Others nearby are narrower and still relevant: marina employees not engaged in construction or expansion at clause (C), and people employed to build a recreational vessel under sixty five feet or to repair one at clause (F).

The section then attaches a single condition to the whole run of them. Those exclusions apply only if the individuals described in clauses (A) through (F) are subject to coverage under a state workers compensation law.

So the recreational operation exclusion is not a way out of insuring people. It is a routing rule that sends them to the state system, and it only functions if the state system actually covers them.

An operator relying on that exclusion while carrying no state cover has misread the sentence, because the exclusion is conditioned on the very thing they have not bought.

Catch A Trophy, TX

What is different about crew?

Clause (G) has no condition on it, and that is the whole story.

The same subsection excludes a master or member of a crew of any vessel, and unlike the run at clauses (A) through (F) that exclusion is not made contingent on state coverage.

A crew member is excluded outright, because they are dealt with somewhere else entirely rather than being routed to a state scheme.

That somewhere else is section 30104 of Title 46, under which a seaman injured in the course of employment may elect to bring a civil action at law against the employer, with the right of trial by jury.

The same section applies the laws governing recovery for injury to a railway employee to that action, which is a negligence regime rather than a compensation schedule.

So the difference is not administrative. One category produces a scheduled payment without regard to fault; the other produces a lawsuit, a jury and an argument about what you did wrong.

The statute is at the same source, and the exclusions at 902(3) sit alongside it.

Which policy actually responds?

A different one for each category, which is why the question cannot be deferred.

Ordinary workers compensation policies are written against a state scheme, and the coverage they provide is the coverage that scheme requires.

Longshore Act exposure is a distinct thing that has to be arranged deliberately, and the federal regulations expect it: Part 703 of Title 20 governs insurance carrier authorisations, self insurer authorisations and certificates of compliance, and it is on the Electronic Code of Federal Regulations.

Section 703.3 requires each employer to secure the payment of compensation either through an authorised insurance carrier or by becoming an authorised self insurer.

Seaman exposure is different again, because there is no compensation scheme to secure. What answers it is liability cover written for that risk, and a general policy may not be it.

Three exposures, three arrangements, and a broker who does not know a subguide runs your boat cannot have priced any of them.

What the rest of your cover has to reach is set out in the captain insurance piece.

What are the penalties for not securing it?

Criminal, and they reach individuals rather than stopping at the company.

Section 938(a) makes an employer required to secure payment of compensation who fails to do so guilty of a misdemeanour, punishable by a fine of not more than ten thousand dollars, imprisonment for not more than one year, or both.

Where the employer is a corporation, the same subsection makes the president, secretary and treasurer severally liable to that fine or imprisonment for the corporation's failure.

It goes further. Those officers are severally personally liable, jointly with the corporation, for any compensation or other benefit accruing in respect of an injury occurring while the corporation was failing to secure payment.

That is a statutory route straight through the entity, which is worth sitting with by anybody who formed a company on the understanding that it stood between them and this kind of exposure.

Section 938(b) adds a separate offence for disposing of, concealing or destroying property after an employee has been injured with intent to avoid paying compensation.

What an entity does and does not protect against generally is examined in the LLC piece.

Does using contractors solve it?

Not reliably, and the statute anticipates the arrangement.

Section 905(a) provides that a contractor is deemed the employer of a subcontractor's employees only if the subcontractor fails to secure the payment of compensation as required.

Read that carefully, because it cuts both ways. A subcontractor who is properly insured keeps their own liability, and one who is not passes it up the chain to you.

Which means the useful thing is not the label on the arrangement but evidence that the other party has actually secured coverage.

Asking for a certificate is the whole of the work, and it is the sort of thing that gets skipped precisely in the relationships where it matters, meaning friends and long-standing arrangements.

Separately, calling somebody a contractor does not make them one, and the test for that is unrelated to this section.

How the arrangement should be documented is covered in the subguide agreements piece.

Why does the seaman route cost so much more?

Because it removes the ceiling that makes compensation schemes affordable.

A compensation system trades certainty for limits. The injured person is paid without proving fault, and what they are paid is set by a schedule rather than by a jury's view of their life.

The seaman route inverts both halves. Fault is back in issue, which is a risk to the employer, and the recovery is whatever the action produces rather than what a table specifies.

Section 30104 also gives the seaman the election, so the choice of route is not the employer's to make.

For a small operation the practical consequence is that the worst realistic outcome under one system is knowable in advance and under the other is not.

That is precisely the sort of exposure insurance exists to convert into a premium, which is why the category question is really an insurance question wearing legal clothes.

How an operator should size the rest of that protection is examined in the umbrella piece.

Does a small operation get a pass?

Not in the federal text, whatever a state scheme may say.

State workers compensation laws frequently carry thresholds based on the number of employees, and a great many guiding operations sit below whatever that number is locally.

Nothing in the federal provisions above turns on how many people you employ. The definitions are about the nature of the work and the location of the injury.

That mismatch is the source of a common and expensive assumption, which is that being too small for the state scheme means being outside all of them.

It also interacts badly with the conditional in section 902(3), since a worker who falls below a state threshold may not be subject to state coverage at all, which is the circumstance in which the recreational operation exclusion stops working.

None of that means a small operation is inevitably inside a federal scheme, which is a fact-specific question. It means the reasoning that gets people there is unsound.

The financial shape of an operation at that size is set out in the margin piece.

Where does an injury have to happen?

Location matters, and for a boat operation it moves during the day.

Section 903(a) makes compensation payable under the federal chapter only if the disability or death results from an injury occurring upon the navigable waters of the United States, including any adjoining pier, wharf, dry dock, terminal, building way, marine railway or other adjoining area customarily used for loading, unloading, repairing, dismantling or building a vessel.

A guiding day crosses several of those boundaries. Loading at a ramp, running on the water, cleaning up in a yard and driving home are not all the same place for this purpose.

Which is another reason the categories cannot be treated as an annual paperwork question settled once. The answer can differ between two injuries on the same day.

Section 903(b) also excludes officers and employees of the United States, a state or a foreign government, which occasionally matters where a guide works alongside agency staff.

Section 903(c) bars compensation where the injury was occasioned solely by the employee's intoxication or by their wilful intention to injure or kill themselves or another.

The permit relationships that put guides alongside agency staff are described in the Forest Service piece.

What does the department actually administer?

A real programme with district offices, not a dormant statute.

The Longshore Act is administered by the Division of Longshore and Harbor Workers Compensation within the Office of Workers Compensation Programs, whose pages sit at the Department of Labor.

The insurance regulations name the specific forms involved, including an application for self insurance, a report of injury experience, agreements and undertakings for self insurers and carriers, an indemnity bond and a card report of insurance.

That level of administrative machinery is a useful signal. Schemes with numbered forms and authorised carriers are not schemes that go unnoticed when somebody is badly hurt.

For a small operator the practical question is never whether to engage with all of it, but whether their broker has established which of the three systems their people sit in.

That is a short conversation held once, and an expensive discovery made after an injury.

How much cover the rest of the operation needs is worked out in the coverage piece.

What about family and casual help?

The categories do not soften for people you know.

A great deal of the labour in this trade is a spouse running shuttles, a son or daughter on the oars for a summer, or a friend filling in for a fortnight.

None of the federal provisions above contains an exception for informality, and the seaman analysis in particular is about the nature of the work aboard rather than the relationship of the parties.

State schemes often do treat family members differently, sometimes excluding them and sometimes allowing an election, which is one of several reasons the state conversation has to happen first.

The awkward case is the person who is excluded from the state scheme by a family exemption and is working aboard, since that is the same shape as the threshold problem described above.

Raising it with a broker is uncomfortable and considerably less uncomfortable than the alternative, which arrives after somebody close to you is hurt on your boat.

Whose work is whose in a family operation causes trouble elsewhere too, examined in the partnership piece.

Does this reach the clients?

No, and conflating the two is a common and dangerous simplification.

Everything in this piece concerns people who work for you. A paying client is not an employee and none of these schemes applies to them.

Client injury sits with your liability cover and with the documents you have them sign, which is an entirely separate structure with separate limits.

The reason to be clear about the boundary is that a single incident can produce both, since a swamped boat does not distinguish between the person paying and the person working.

An operator who has arranged one side thoroughly and the other by assumption has a gap that only appears on the worst day of their career.

The client-side arrangements are dealt with in the waivers piece.

What should a guide do before the first hire?

Three conversations, in a specific order.

Start with the state scheme, because it is the one most likely to apply and the one with the clearest local answer about thresholds and requirements.

Then ask a marine insurance broker specifically about crew exposure and about Longshore Act exposure, naming the boat and the work rather than describing the business in general terms.

Then ask a lawyer the classification question if anybody will be working aboard, since that is the determination the whole structure hangs on and it is not a question for a broker.

Do all three before the first payment rather than after the first injury, for the same reason the classification question is cheaper in advance.

And get certificates from anybody working as a contractor, because section 905(a) makes their failure to insure your problem rather than theirs.

What else changes at that first hire is set out in the first hire piece.