Here’s what you need to know about workers’ compensation and independent contractor status.
Understanding Workers’ Compensation
Workers’ compensation is a state-mandated insurance program that provides benefits to employees who suffer job-related injuries or illnesses. These benefits typically cover medical expenses, rehabilitation costs, and a portion of lost wages. However, eligibility for workers’ compensation hinges on the classification of the worker.
Employee vs. Independent Contractor
Classifying an employee or an independent contractor significantly impacts their eligibility for workers’ compensation. Generally, traditional employees are covered by workers’ compensation, while independent contractors are not. This distinction is based on several factors:
- Control and independence: Employees typically work under their employer’s direct control and supervision, whereas independent contractors have more control over how they complete their work.
- Financial relationship: Employees usually receive a regular wage or salary, while independent contractors are paid per project or task.
- Nature of work: The work performed by employees is often integral to the employer’s business, whereas independent contractors provide specialized services that are not necessarily central to the employer’s primary operations.
Why Independent Contractors May Not Be Eligible
Independent contractors are considered self-employed individuals who operate their businesses. As a result, they are not covered by their clients’ workers’ compensation insurance. The rationale behind this exclusion is that independent contractors can obtain their insurance coverage, including health insurance and liability insurance.
Options for Independent Contractors
Although independent contractors are not eligible for traditional workers’ compensation, they still have several options for protecting themselves in case of work-related injuries:
- Occupational accident insurance: Independent contractors can purchase occupational accident insurance, which provides benefits similar to workers’ compensation. This insurance covers medical expenses, disability benefits, and death benefits in case of a work-related injury or illness.
- Health insurance: Comprehensive health insurance covers medical expenses incurred from work-related injuries.
- Disability insurance: Short-term and long-term disability insurance policies can provide income replacement if an independent contractor cannot work due to an injury.
- Contractual provisions: Independent contractors can negotiate contractual agreements with clients to include provisions for injury compensation or access to company-provided insurance benefits.
When to Contact an Attorney
If you are an independent contractor and have suffered an injury while working, it is crucial to understand your rights and options. Consulting an attorney specializing in workers’ compensation or personal injury law can provide valuable guidance. An attorney can help determine whether you were misclassified as an independent contractor. If so, you could be eligible for workers’ compensation benefits. They can also assist in exploring other legal avenues for compensation.
While independent contractors typically do not qualify for traditional workers’ compensation, they are not without options. IC’s must secure appropriate insurance coverage and understand their rights. This protects them against the financial impact of work-related injuries. If you have been injured while working as an independent contractor, it is advisable to seek legal advice to ensure that your rights are protected and that you receive the compensation you deserve.
If you need help with a claim or you’d like to speak to someone about workers’ compensation insurance, contact Shugarman & Mehring.
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