Does Workers’ Compensation Cover You if You’re an Independent Contractor?
Workers’ compensation is the type of business insurance that covers an injured worker’s medical and other expenses if he or she suffers an on-the-job injury. Workers’ comp laws vary from state to state. Each state has the authority to pass its own statutes regarding which employers must carry workers’ comp insurance. As well as which workers get what compensation and how much, in the event they sustain a workplace injury.
For the most part, state laws require employers to provide workers’ compensation benefits to their employees. However, they generally do not require employers to provide workers comp for independent contractors. In other words, workers’ comp likely does not cover you when you work as an independent contractor rather than as an employee.
How Do You Get Workers’ Comp for Independent Contractors?
As with most generalizations, however, the idea that workers’ comp does not cover independent contractors is not always true. If you’re an independent contractor who contracts to work for a company and then sustains an injury while performing that work. You have two ways in which to claim workers’ compensation benefits:
- Make a regular workers’ compensation claim that challenges your independent contractor status with the company
- Make a workers’ compensation claim under your own workers’ comp policy
Challenging Your Employment Status
The difference between an independent contractor and an employee is not always clear cut. In fact, it often comes down to the specific facts surrounding the person who’s performing the work In addition to the company for which he or she is performing it. If you make a regular workers’ comp claim challenging your true independent contractor status. Your state’s workers’ comp administrative body will consider numerous factors to determine whether you are an independent contractor or an employee, including:
- How much control does the company exercise over what you do for it and when you do it?
- Did the company pay you on a regular basis or on a piecemeal basis as you finish each project?
- Are you assigned by the company to do tasks, or do you choose what work you do for it?
- Did you set your own pay and/or negotiate with the company as to the amount of your pay?
- Does the company require you to work a certain number of hours per week or require you to produce a specific quantity of work?
- Does the company provide you any of the equipment you need to perform your work for it?
- Do you perform more than one type of job for the company?
- Did you and a company representative sign a written agreement setting forth your status and work terms prior to your starting to work for it?
Common obstacles for Independent Contractors
Keep in mind that there is a continuing debate raging across America with regard to the true status of many workers. Particularly surrounding Uber, Lyft and other ride-hailing company drivers. Some companies misclassify their workers as independent contractors. In order to avoid providing workers’ comp and other benefits they must legally provide to employees. In addition, they need not withhold federal or state income taxes from the paychecks they send to independent contractors. Nor do they have to pay the employer’s share of FICA taxes. For example, Social Security tax or Medicare tax. Obviously, a company saves itself a lot of money and paperwork by claiming its workers are independent contractors. Instead of claiming them as employees.
How Taxation Can Impact Workers Comp Claims
Nevertheless, both the Internal Revenue Service and state workers’ comp administrative bodies are more than open to your challenge of your employment status. Most states consider the default employment status to be that of employee. Not an independent contractor.
Even if you signed a written contract with the company stating that you’re an independent contractor. This may well not be sufficient to “prove” that fact. Courts have traditionally looked with suspicion on so-called contracts of adhesion. In terms of your contract with the company for which you work, these are adhesion contract hallmarks:
- The company drafted the contract with no input from you.
- The contract contains standard language, also known as boilerplate language, that does not vary from one prospective worker to another.
- The company presented this contract for you to sign before it would “hire” you.
- The contract represented a “take it or leave it” proposition. Leaving you no choice but to sign if you desired to work for the company.
Furthermore, the fact that the company withholds none of your taxes and sends you a 1099 form each year rather than a W-2 likewise is not proof per se that you’re an independent contractor with respect to that company.
Claiming Workers’ Comp Under Your Own Policy
You may not be aware of it, but as an independent contractor, you can buy your own workers’ compensation policy. You may well wish to do this if you plan to do a lot of contracting work. In addition, you will need to purchase one of these business policies if you intend to have subcontractors working under you.
Your personal health insurance policy likely does not cover job-related injuries you sustain while working for someone else. Consequently, you should not simply assume that it will pay for your medical and associated costs. Or, your loss of income while recovering from such a situation. The more likely scenario is that you will be held personally responsibility for paying such bills. Purchasing your own workers’ comp policy solves these problems.
Determining Premiums and Policies
The premiums for independent contractor workers’ compensation policies vary by state. They also depend on such factors as the following:
- The type of work you do
- The specific details of your independent contractor business
- Whether you subcontract any of your work to others
Why Do You Need a Local Attorney?
Filing a workers’ comp claim can be complicated in any circumstance. Filing one where you must challenge your independent contractor status can be even more complicated. Your best strategy may be to contact an experienced local workers’ comp attorney. He or she will not only know your state’s workers’ comp laws but also can guide you through the entire process.
Work With an Experienced Local Lawyer
Submit a request online today or call us at (866) 345-6784 to get in touch with an experienced workers’ compensation lawyer in your area.