Employers are not required by state law to purchase coverage for independent contractors, but some employers misclassify employees as independent contractors in order to avoid payroll taxes and workers’ comp premiums. As independent contractors are not eligible for workers’ compensation coverage, some employers may even claim a worker was not an employee after they are injured on the job. But whether or not a worker is an employee is not controlled by what the employer decides to call them, but by the details of their job and typical job duties.
When determining if a worker is eligible for workers’ compensation benefits, the first step is determining if they are an employee or an independent contractor. When making this determination, there are certain issues related to the worker’s time with the company and job duties that must be considered.
Lack of Direction and/or Company Control:
When working in the capacity of an independent contractor, workers provide a service pursuant to a written or unwritten contract without the direction of the individual or company paying for the service (the employer). As an independent contractor, the worker determines and controls how the agreed upon service is provided, who completes it, and how it is accomplished. They act “independently”, free of direction and control from the employer.
Hiring Process and Payment:
In order to be an employee, a worker would receive wages on an hourly or salaried basis. Independent contractors typically receive payment per service or job.
Equipment Used for Work Purposes:
Independent contractors typically provide the equipment necessary to complete the job, while employers usually provide the necessary equipment for employees.
It is important to note that even agreements describing the worker as an “independent contractor” are insufficient when attempting to qualify a worker as an independent contractor.
When the issue of misclassification is at hand, the state worker’s comp board will consider each of the above factors in connection to the worker’s employment and job duties.
While workers’ compensation does not cover independent contractors, it is not always that simple. If you need to discuss potential misclassification in the workplace in connection to a workers’ comp claim, please contact one of the experienced workers’ comp attorneys at Stanley-Wallace Law.