Employee or Independent Contractor? Who is Eligible for Workers’ Comp?
You may be wondering if you’re eligible for workers’ compensation based on your employment status, read below to see the differences in each status.
North Carolina law requires businesses with three or more employees to carry workers’ compensation insurance to protect them in case of injury or illness. There are a few exemptions, including household domestic workers, certain agricultural businesses and farms with fewer than 10 laborers. But in most cases, your employer is legally required to provide workers’ compensation coverage for you.
However, businesses may also hire freelancers and other independent contractors to do work for them. By law, these people are considered to be self-employed, and they are not eligible for workers’ compensation coverage or benefits.
Knowing this, you might assume that if the company you’re working for says you are an independent contractor, then you must not be eligible for workers’ compensation benefits. Unfortunately, it’s not as simple as that.
Just because the company says you’re an independent contractor, and not an employee, does not mean that you are one. Also, you shouldn’t assume that you are an independent contractor because you get a 1099 tax form, instead of a W-2, from the company at the end of the year. Your employer may be misclassifying you with the IRS, as well, to avoid paying taxes, Social Security, and unemployment and injury insurance on your behalf.
If you’re a truck driver, there are some pretty specific rules about workers’ compensation coverage for independent contractors. If a trucking owner-operator does not have workers’ compensation insurance coverage, the motor carrier must provide workers’ compensation coverage. If you are a truck driver who has been injured in a wreck or if you’ve suffered another work-related injury, you may very well be entitled to workers’ comp benefits despite the confusion created by the terms “independent contractor” or “owner-operator.”
In many industries, companies misclassify employees as independent contractors – sometimes deliberately – to avoid providing workers’ compensation coverage and other benefits to these workers. An experienced workers’ compensation attorney can help determine your actual employment status – employee or independent contractor – so you get the benefits you deserve.
Plenty of people are properly classified as independent contractors. These self-employed people, often also called W9 employees or freelancers, perform work for a variety of different companies or clients, set their own hours, and derive their income from multiple sources.
However, many companies improperly assign the “independent contractor” designation to employees. In doing so, they might skirt their legal obligation to provide workers’ compensation coverage to protect these workers if they are injured on the job or develop a work-related illness. Do not just take the company’s word on these distinctions, and definitely do not forego filing a workers’ compensation claim simply because the company labels you as an independent contractor.
One good rule of thumb for determining whether a worker is an employee or an independent contractor is whether they work only with one company and that business sets his or her hours and specific duties. Such a person is likely an employee and, as such, they may be entitled to benefits under workers’ compensation.
Other important questions to ask in determining whether you are an employee or an independent contractor:
- Do you work for more than one company?
- Do you set your own hours or does your employer set your hours?
- Are you paid on set dates in regular amounts?
- Are you given extensive supervision or are you allowed freedom in when, where, and how you do your job?
- Who provides the materials and tools you use to perform your job?
- Have you been trained by the company to do your job in a certain way?
- Have you worked for the same company for many years?
If you have been denied workers’ compensation because you are an “independent contractor,” contact one of our experienced attorneys at the Deuterman Law Group to see if you might be eligible for benefits.