Are you an independent contractor, working in the new “gig” economy? Are you worried about what happens if you are injured at work?
If you’re not, you should be.
Every day, more and more people are working as independent contractors and not as employees. They don’t receive the same benefits as employees. As a matter of fact, they often do not receive any benefits.
Workers’ compensation is one of them. It doesn’t apply to gig workers, only to employees. So if you are an independent contractor and are injured on the job, what can you do?
You do have options available. Keep reading to learn more about independent contractors and workers’ compensation.
What is the Difference Between an Employee and an Independent Contractor?
An employee is a person who works for an employer and receives an hourly or salaried wage. The employer is required to provide benefits, including workers’ compensation coverage and overtime. An employee only works for one employer.
That employer has a high degree of control over their work. They tell an employee what their job is, where to do the job, when they will work, and how they will do the work. They provide the equipment for the employee to do their work.
Meanwhile, an independent contractor has a great deal more control over their work. They are usually paid by the job, not the hour. They agree with an employer to do a certain job and complete it by a specific deadline. They have control over where, how, and when they do the work.
They can usually choose their own working hours and take as much vacation time as they wish. But they also much provide their own health insurance and benefits. And, if they are injured on the job, there is no one else to foot the bill.
Independent contractors provide their own equipment for the work they do. And, they often work for multiple companies. Companies do not have to offer benefits such as health insurance, paid sick leave, overtime, or workers’ compensation to Independent contractors.
Sometimes, employers deliberately misclassify an employee as an independent contractor to avoid paying taxes and offering benefits. But determining a worker’s status is not done simply by what an employer calls them.
Most states have very specific guidelines differentiating between an employee and an independent contractor. A court would look at the relationship between the company and the worker. It would consider how independent the worker is or if the employer facilitates many of the decisions of how and when the work is completed.
If a person is deliberately misclassified as an independent contractor instead of an employee, the company may face penalties from the State.
What Is Workers’ Compensation?
Worker’s compensation is insurance that provides coverage for injuries that happen to an employee as a result of their work. Workers’ comp benefits may cover medical costs, services needed to return to work, and reimbursement for lost wages.
To receive workers’ compensation benefits, you must be an employee who has a work-related injury or illness. Your employer must carry workers’ compensation insurance. And, you must report the injury and file a claim by your state’s reporting deadline.
There are some exemptions if you are a domestic, farm, seasonal, or temporary worker. You will want to check the laws in your state to see if these exemptions apply to you.
Workers’ Compensation for Independent Contractors vs. Employees
If an employee is injured on the job, they are covered by workers’ compensation. In exchange, the employee agrees not to pursue a personal injury lawsuit because the employer is providing workers’ comp. This protects the employee and saves the employer money.
An employee is able to file a worker’s comp claim regardless of how the injury happens. The employer does not need to be negligent or do anything to cause the injury. If someone is injured at work, they are eligible to have workers’ compensation. This covers any medical care and provides disability income for any time they are unable to work.
When they file a workers’ comp claim as an employee, they receive medical coverage and a portion of their lost wages. If they don’t feel like they have received enough, they can bring a claim against the workers’ compensation insurance carrier.
However, unless they can show negligence for the accident, this is all they are eligible for as an employee. They cannot recover full payment of their lost wages or seek punitive damages for pain and suffering.
So, do contractors get workers’ comp? Quite simply no. You do not qualify for workers’ compensation, and you are not eligible to make a claim.
You may be able to bring a negligence suit against the company you’re working for, however. If you were able to prove that your employer was negligent, you would then be entitled to the same compensation as an employee, including payment for medical coverage and lost wages.
If you have been misclassified as an independent contractor when you are actually an employee, the courts may decide you are eligible for workers’ compensation. If this happens, you might be able to sue for it on the basis of this misclassification. This could open the door to possibly receiving other employee benefits, like unpaid overtime, as well.
What Can You Do If You Are Injured?
Companies don’t need to offer protection to independent contractors for injuries on the job. When they occur, the independent contractor needs to rely on their own to cover any medical costs and lost wages.
If you are hurt on the job while working as an independent contractor, there are a few things you can do.
First, for the best workers’ comp advice, you should consult a lawyer.
Experienced workers’ comp lawyers can evaluate at the situation, assess the impact of your injury and working conditions. They will determine if you were misclassified or if any of the exemptions apply to you.
They will explain all of your options and advise you on how to move forward.
You need to confirm if the company carries workers’ compensation for everyone or just employees. Some companies will carry coverage for anyone who works for them, so it is worth taking the time to inquire.
If you are able to prove you were misclassified and are actually an employee, the courts may decide you are eligible for workers’ compensation.
As an independent contractor, you may be able to bring a negligence case against the company. You will need to show willful misconduct or neglect – that they failed to act reasonably and/or you were injured as a result of using a defective product. Other parties may also be liable (such as a vehicle operator, the manufacturer, a piece of defective machinery, etc.)
If you are injured on the job and have been denied workers’ compensation, you do not necessarily need to accept that decision. Employers and their insurance companies will do everything they can to limit their liability. They routinely deny valid workers’ comp claims. You are able to – and often should – fight the denials.
Finally, you may be eligible for Social Security Disability benefits. If you have worked a certain number of years and paid self-employment tax, you may qualify. The amount you qualify for will depend on your reported income over the years.
Some states also offer disability compensation programs so be sure to look into filing with them as well.
Be Prepared for the Future
As an independent contractor, you are responsible for yourself first and foremost. Always put your health first and seek proper medical treatment. Then, worry about potential compensation.
You should always carry your own insurance so you are not financially devastated should you get injured while on a job. This includes general liability, health, and workers’ compensation insurance for injuries and disability. If you are not able to pursue legal action against a company, then you are at least covered through your own insurance.
Have A Plan
Independent contractors are not immune to injuries, accidents, and disabilities. They need to do even more to make sure they are protected. Having the right resources and a plan in place ahead of time will make things much easier should an injury occur at work.
You can find more business information articles for independent contractors on our site.
Disclaimer: This post and all its contents are for educational/informational purposes only, are not intended as legal advice, and are not intended to replace consultation with qualified workers’ comp lawyers.