Is an Independent Contractor Covered by Workers' Comp?

Independent contractors are not eligible for workers' compensation coverage, unless they've been misclassified by their employers.

By , Attorney · UC Law San Francisco

Independent contractors are not eligible for workers' compensation coverage, and employers are not required by state law to purchase coverage for independent contractors.

However, some employers misclassify employees as independent contractors to avoid paying payroll taxes and workers' comp premiums for them. Especially when a worker is injured, an employer may try to deny that the worker was an employee.

Whether or not a worker is an employee is not controlled by what name the employer uses for the worker, but by the circumstances surrounding the employee's work.

What Makes a Worker an Independent Contractor?

While different jurisdictions use different tests to determine who is an independent contractor and who is an employee, courts and government agencies generally look at the following factors.

Amount of Direction and Control

Independent contractors provide a service pursuant to a contract (whether written or unwritten) without the direction of the person paying the bill (the employer). An independent contractor controls how the service is provided, who provides it, and the method of accomplishing it. The key is that the independent contractor acts independently, free of direction and control of the hiring company (employer).

Hiring and Pay

To be an employee, the worker does not need to be interviewed and formally hired. Independent contractors typically receive payment by the job; on the other hand, employees receive wages on an hourly or salaried basis.

Equipment Provided

Another factor in distinguishing an independent contractor from an employee is who provides the equipment. An independent contractor typically provides the equipment necessary to complete the job, whereas an employer typically provides the equipment for the employee to complete the job.

Character of Work and Training

Another way to distinguish an independent contractor from an employee is to consider the character of the work involved. If the work is highly skilled, and the worker only performs a single job, the worker is likely an independent contractor. Independent contractors almost always work for more than one company.

Alternatively, if the worker is trained by and receives regular work from the same company, the worker is more likely to be considered an employee.

Written Agreements as to Employment Status

Even agreements stating the worker is an "independent contractor" are insufficient to qualify the worker as an independent contractor.

The state worker's comp board will consider all of the above factors regarding the workers' employment situation to determine whether the worker was an independent contractor or an employee.

What to Do If You've Been Misclassified and Have Suffered a Work-Related Injury

If, considering the factors above, you suspect that you've been wrongly classified as an independent contractor, you might be entitled to workers' comp pay for your work-related injury or illness.

After getting any medical treatment required, you should report your injury to your employer in writing. Most states have strict (and short) deadlines for reporting work-related injuries for workers' comp purposes, so don't delay. At this point, your employer might tell you that you don't qualify for workers' comp because you're a contractor.

One response would be to tell your employer that you think you were inadvertently misclassified, and that according to the law you're actually an employee. If your employer isn't convinced, contact an experienced workers' comp lawyer to help you file your claim.

Most workers' comp lawyers don't charge a fee unless you win your case. And your employer is not allowed to retaliate against you for filing a workers' comp claim if you are in fact an employee.

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