What are the risk management considerations of hiring members as employees?
We do not support our clients hiring members as employees. The main concern is with workers’ compensation coverage. First, there is a question of whether or not this type of employee would even be eligible for workers’ compensation coverage because of the way workers’ compensation policies are structured. If they do have it, employing members, whether they are residents of the facility or not, broadens the liability of the workers’ compensation coverage. It becomes more difficult, if not impossible, to ascertain whether the injury took place at work or during personal time, which could ultimately make the workers’ compensation coverage a de facto health insurance replacement.
We also have concerns with Employment Practices Liability, including the following complicated questions:
- Are hours clearly defined?
- What happens if members are doing work on personal time, either on their own or at the direction of their supervisor?
- What if they are disciplined either based on not completing job responsibilities or for violating policies as a member?
- Does that open the employer (chapter or house corporation) to claims for hostile work environment?