How Independent Contractors and Workers’ Comp Impact Each Other
If you’ve been injured on the job as an independent contractor, you may have a lot of questions about whether you might be eligible for workers’ compensation. Bear in mind the role of independent contractors and the protection of workers’ compensation are two completely different areas of business and the law.
Workers’ compensation covers employees of a specific company. Independent contractors are, by definition, not employees.
But there is a lot of confusion about how these two things relate with each other and don’t – and whether you qualify as an employee or contractor to begin with. So here’s what you need to know about workers’ compensation as an independent contractor.
Workers’ Comp as an Independent Contractors: It’s Up to You
Assuming you’re actually an independent contractor, you are required to cover your own workers’ compensation costs. Independent contractors aren’t eligible for workers’ compensation benefits from the company they’re serving.
Employers don’t need to provide workers’ comp for contractors; and they don’t have to list those contractors as regular employees when reporting their staff numbers for workers’ comp purposes.
This is similar to the rules around other benefits you get as an independent contractor. For example, your client isn’t required to provide health insurance. That’s coverage you have to pay for and provide for yourself on your own.
Many people seek out regular employment to have access to these benefits. While independent contracting may have many advantages, like setting your own schedule in some cases, it also comes with this big disadvantage of providing all of your own support.
That part of the law is very clear. However, things get tricky when employers try to cut corners.
Worker Misclassification as an Independent Contractor
Sometimes an employer will list an employee as an independent contractor in order to save money on workers’ comp coverage. This practice is called “worker misclassification.”
Worker misclassification is a form of fraud. It’s actually so common that the state of Tennessee has a task force to oversee it.
The task force website has a number of resources available, including a form and hotline for reporting misclassification. They also provide a list on their website to help you figure out the difference between a contractor and employee.
Among other factors, contractors:
- perform work for multiple customers
- set their own hours
- provide their own tools to complete the work assigned to them
- have a separate business location
- file self-employment taxes, and
- can’t quit a task easily if they’ve signed a contract to perform it.
Employees, on the other hand, work for one employer. That employer can set their hours for them and has to provide tools for the completion of their work. Employees accept a wage or salary. They can quit at any time.
It’s important for you to remember that an employer can’t just say whether you’re an employee or not. Your status as a worker is determined by the law.
Help If You’ve Been Injured on the Job
If you’ve been injured on the job, our workers’ comp attorneys in Memphis may be able to help. If you have questions or want to get started receiving your workers’ comp benefits, contact us today.