Association’s landscaper doesn’t provide workers’ compensation

Q. Our association is in the process of replacing its landscaping contractor. The contractor has numerous employees; however, the contractor does not have workers’ compensation insurance. He says he can’t afford the insurance and that he can get his employees to sign a waiver. Must an employer provide workers’ compensation insurance to its employees, and can employees sign a waiver so that the employer does not have to provide workers’ compensation insurance?

A. In Illinois, employers are required to maintain workers' compensation coverage. An employee cannot waive rights under the Illinois Workers' Compensation Act. As an employer, with employees, the landscaper would have to provide workers’ compensation insurance to its employees. So, the association should either find another contractor or require the contractor to provide workers’ compensation insurance for its employees.

A similar issue often comes up when an association is considering hiring an independent contractor who is a sole proprietor. Sole proprietors are sometimes required to maintain workers' compensation insurance, and sometimes are not but may do so voluntarily. If an independent contractor without insurance is injured on the job, he may claim that he was really an employee of the association. If the claim is successful (and I have seen such claims succeed in the past), the association would generally be protected only if it has its own workers' compensation insurance. Otherwise, the association could be exposed to an uninsured claim. Why would an association want to put itself in that position?

The above discussion applies to the situation where the association hires an independent contractor and not an employee. To the extent that an association hires an employee, the law requires the association to have workers’ compensation insurance or to obtain permission from the state to self-insure (not likely to be granted to a small condominium association).

Q. The board of our condominium has been discussing an amendment to bring the declaration into conformity with the Condominium Property Act. They say this can be adopted by the board, without owner approval. Is that correct?

A. Yes, this is permitted by the Condominium Property Act. Section 27(b) of the expressly permits the board to amend the declaration, without owner approval, to conform to the act. The amendment will reflect what the association is already obligated to follow under the act, whether or not the applicable language of the act is currently included in the declaration. The amendment will not make any changes of the type that would require owner approval. A similar procedure is available to the board of a common interest community association under the Common Interest Community Association Act.

It is a good idea for the board of an association to have the declaration updated to conform to current law from time to time. Such an amendment will reduce the likelihood of confusion between what is or isn’t in the declaration and what is required by the applicable statute governing the association.

Q. If it weren’t for proxies, our association would never be able to establish a quorum for owner meetings like the annual meeting. Can an owner, in a proxy, limit the matters on which the proxy holder can vote?

A. In general, an owner can limit the matters on which the holder of the proxy can vote at the meeting for which the proxy is given. The proxy can also instruct the proxy holder how to vote on all or any specified issues to be addressed at the meeting Similarly, the proxy can give the proxy holder discretion as to how to vote on all or any specified issues.

• Matthew Moodhe is an attorney with Kovitz Shifrin Nesbit in the Chicago suburbs. Send questions for the column to him at condotalk@ksnlaw.com. The firm provides legal service to condominium, townhouse, homeowner associations and housing cooperatives. This column is not a substitute for consultation with legal counsel.