Do I Need Workers’ Compensation Insurance for Our Family-Run Brick and Mortar Business?
As the owner of a thriving online business transitioning into a physical store, new responsibilities undoubtedly arise. One common query for entrepreneurs in this situation is whether they must obtain workers’ compensation insurance, particularly when family members are involved in the business operations without regular pay.
In our case, the business has traditionally been a family affair, with relatives contributing as needed. Until now, we have opted not to draw personal salaries, instead allowing profits to grow within the business itself. However, this raises an important question: As we move into the world of brick-and-mortar, is it necessary to start paying family members for their work and, consequently, to secure workers’ compensation insurance for them?
Operating from Massachusetts, it’s vital to understand the state’s specific regulations concerning workers’ compensation. Generally, Massachusetts mandates workers’ compensation insurance for all employees, including family members, regardless of the frequency or nature of their contributions.
Ensuring compliance with these laws not only protects the business but also safeguards the well-being of those who provide valuable support to its operations. As such, obtaining the necessary coverage is both a legal obligation and a prudent business practice that can offer peace of mind as the business evolves and expands.
One Comment
Great insights! It’s important to remember that even family members working in your business can be considered employees under state law, especially in Massachusetts where workers’ compensation coverage is required for all workers, regardless of employment arrangement. Beyond legal compliance, having proper workers’ comp in place can provide valuable protection for your family members—covering medical expenses and lost wages if an accident occurs. Additionally, establishing clear policies around compensation and coverage now can help prevent future disputes and ensure everyone’s roles and protections are well-defined as your business expands. Keep up the thoughtful planning—this proactive approach is key to sustainable growth!