Contract-based employment has grown increasingly popular in the United States with many people opting for self-employment rather than more traditional hiring-based employment with larger companies. Independent contractors generally have more flexibility and control over their work, but this comes at a cost. The law does not equally protect employees and independent contractors concerning workers’ compensation for workplace injuries. While most American employers must carry workers’ compensation insurance policies in the event of employee workplace injuries, they do not have to cover independent contractors.
Depending on the type of work an independent contractor does, workers’ compensation may not seem like much of a concern. Some independent contractors who perform dangerous or highly specialized work take on a high level of risk and must pay for their own health insurance in lieu of relying on employer-provided plans. However, while independent contractors cannot rely on workers’ compensation, they may have other options for securing compensation after workplace injuries.
In some cases, employers classify employees as independent contractors to avoid paying for employee benefits and tax purposes. However, depending on the nature of the independent contractor’s work and any written agreements between the contractor and the employer, it’s possible for an employee to be a contractor in name only. If an employee can prove his or her status as an actual employee of a company and a contractor in name only, he or she should be able to secure workers’ compensation after a workplace injury.
If an independent contractor’s working relationship with an employer does not constitute a firm employer-employee relationship, then the independent contractor must look for other channels of compensation. For example, if an independent contractor has little oversight from the employer, works for multiple employers at once, and has his or her own office separate from those employers, then he or she would have a hard time proving a direct employer-employee relationship.
Other Options Beyond Workers’ Comp
Depending on the circumstances of a workplace injury, an independent contractor may have more viable avenues of compensation instead of attempting to prove an employer-employee relationship and collecting workers’ compensation. Some of the possible scenarios that could offer alternative options include:
- Personal injury lawsuits. If an independent contractor suffers a workplace injury due to an employer’s or other party’s negligence, the contractor can file a personal injury lawsuit to recover his or her damages. This can include property damages, medical expenses, lost income and pain and suffering.
- Product liability claims. If a dangerous or defective product caused the independent contractor’s workplace injury, then he or she may have the ability to file a defective product claim against the manufacturer. The claimant will need to prove that the product in question was defective by design, production, or marketing and that the defect caused the claimant’s damages.
- Third-party claims. If a third party unrelated to the independent contractor or an employer causes an accident, the injured contractor can file a claim against the liable third party. For example, an engineer working as an independent contractor at a construction site suffers injuries when a drunk driver hits the contractor on the way to the site. In this situation, the contractor would take legal action against the drunk driver, not the employer.
- Independent insurance coverage. Some independent contractors who perform high-risk jobs purchase their own insurance coverage that can cover damages resulting from a workplace injury. It’s vital for contractors to understand the disclaimers and conditions of these policies so they know which events the policy can cover.
Independent contractors should be clear on their employment status and consult with experienced employment attorneys about their concerns. If you recently suffered a workplace injury and believe you are a contractor in name only, an attorney can help you determine your options for legal recourse. If you’re an independent contractor without workers’ compensation coverage, an attorney can help you determine if another person or party is liable for your damages.