Independent contractors don’t qualify to receive benefits under workers’ compensation. This is sometimes exploited by employers who misclassify their employees as independent contractors in order to avoid paying out workers’ comp benefits. Fortunately, “independent contractor” is more than just a classification used by employers. An employer must show that the worker they are denying workers’ comp benefits on these grounds is in fact an independent contractor by legal definition. The distinction between employee and independent contractor is largely a question of how they pay federal taxes. So, the IRS has provided the main guidelines about determining how to classify workers. The IRS has a 20 Point checklist, but for the sake of brevity, we can break the 20 points down into 3 basic questions:
How much control does the employer have over worker behavior and results?
In other words, who provides the equipment and training for workers, who determines where, when, and for how long the workers labor for, etc. If your employer determines your hours, provides job specific training, and provides you with the necessary equipment to perform your job, you’re probably an employee.
How much control does the employer have over finances?
This is a question of who is responsible for the worker’s profit and loss on a job. For employees, their employers make money based on employee labor, then pay their employees periodically based on an agreed upon rate. Private contractors have more direct control over their payment on each job.
What is the relationship between employer and worker?
Does the employer offer the worker any benefits? If so, the worker is most likely considered an employee. If the employer and worker have a long-term working relationship, the worker is most likely an employee as well. Independent contractors are hired by contract to work on a specific job for a specific amount of time. They are paid an agreed upon fee when they’re finished, rather than a wage based on how much they are working.
These are the main questions the IRS seeks to find answers to in determining if you are an independent contractor or an employee. When misclassified employees are hurt at work and told they don’t qualify for workers’ compensation because they are “independent contractors,” they are usually unaware they were considered independent contractors until that moment! This is a good indication that you have been misclassified and need further legal assistance in order to prove it.
We’ve handled multiple cases before just like this one and have won appropriate benefits for our clients. If you have been denied benefits for your work injury on these grounds, please call us immediately! We are here to help injured workers protect themselves and receive proper compensation, and we will do all we can to ensure you receive the most benefits possible.