Cheated By The Fine Print? Contractors And Worker’s Comp

Independent contractors are eligible to file for workers’ compensation if they have their own workers’ compensation insurance or if they were hired to do a job by a company that provides these benefits.Landscapers, skilled tradespeople, painters, construction and domestic workers, and other types of independent contractors are deceived into believing that they are not entitled to workers’ compensation because they are not regular employees of a company. However, they are entitled to workers’ compensation in certain instances. 

License: Creative Commons image source
License: Creative Commons image source

Companies who hire uninsured independent contractors to do a job must provide workers’ compensation insurance for them and anyone else the independent contractor hires to work on the job. So, independent contractors are entitled to workers’ compensation just like a company’s regular employees.

According to Stokes & Kopitsky, “Even if you work for a subcontractor who claims he is not responsible for providing
workers’ compensation, an experienced premises liability lawyer can help you find a general contractor or union that is. Independent contractors may have a personal injury claim for negligence that is not barred by workers’ compensation law.”

Independent Contractor or Employee?

Independent contractors differ from employees in the sense that they work for themselves whereas an employee works for a company. Independent contractors determine their own work hours, have their own tools or materials, get paid by the job, and pay their own local, state and federal taxes. Independent contractors are not covered by certain labor and employee laws. To cover themselves if they are injured on the job, independent contractors should purchase their own liability insurance and a workers’ compensation insurance policy.

Employees, on the other hand, earn wages and are obligated to follow the rules of the company who pay
s them. A company sets employees’ work hours, provides employees with tools and materials to do their job and withholds the local, state and federal taxes from their paychecks. Employees are protected by labor and employment laws and are entitled to workers’ compensation if they are injured on the job.

Misclassification of Employees

A debate has been raging for quite some time now over companies that classify an employee as an independent contractor. Companies save money in misclassifying employees because they are not obligated to withhold income taxes and provide benefits, such as overtime, unemployment insurance and family and medical leave.

The U.S. Labor Department has joined with states to look into this problem and is holding companies liable when they are found to have intentionally misclassified workers. Because the state and federal governments a
re working with the IRS over this issue, companies have been advised to review the status of each employee to make sure they are in compliance with federal and state labor laws.

Providing Benefits for Independent Contractors

Under the federal Fair Play Act, independent contractors carry the status of “employee” of companies who hire them. This is why a company who hires an uninsured independent construction worker to perform a job must provide workers’ compensation benefits.

If you are an independent contractor without workers’ compensation insurance, it would be to your advantage to purchase an insurance policy. However, if you have been told that you are not entitled to workers’ compensation, research federal laws and laws of your state or contact a workers’ compensation lawyer to get clarification before addressing the matter with the company who hired you

About the Author: Domonique Powell is an independent contractor who enjoys sharing information with others.