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Independent Contractors Are Typically Excluded From Workers' Compensation Benefits
Not all workers are covered by workers' compensation laws. Most states exclude certain categories of workers, including independent contractors. Independent contractors undertake work subject to the will and control of the person for whom the work is done as to the result but not as to the methods or means. An independent contractor has a level of independence in their work that an employee does not have. Independent contractors tend to have specialized skills and use their own resources in their work. They may hire people to help them complete an assignment. Since an independent contractor is not subject to the same level of control by the employer, and they can make their own judgments as to how the work gets done, they are generally expected to prevent and deal with work-related injuries.
Some states have statutes that explicitly exclude independent contractors from workers' compensation benefits. Other states don't exclude independent contractors but do not clearly include them, either. When the statute is unclear courts may find that an independent contractor is not the type of worker that is intended to be covered as they do not meet the statutory definition of employee. In any workers' compensation case a worker must show that they are an employee, and that the injury arose out of, and in the course of, employment to be entitled to benefits. If a worker has the level of independence to qualify as an independent contractor then, it is assumed, they cannot also be an employee.
Tests applied to determine if a person is an employee or independent contractor vary from state to state. The tests are typically flexible, and require the court to consider all the factors and circumstances to determine which categorization is most appropriate. Since the matter at issue is generally the level of independence a worker has over the work process, some of the issues that are considered include: the worker's flexibility over their hours, the worker's use of their own tools, and whether the individual works on-site. Again, no single issue is controlling; the absence or presence of one of the factors does not control the outcome. The whole picture must be considered before a conclusion is reached.
Sometimes a worker seems to meet all criteria for independent contractor status, but is considered an employee. If the worker seems to be independent contractor but does not hold herself out to the public as performing an independent service, and regularly devotes all or most of her time to a particular employer, she will probably be considered an employee despite the other factors.
Courts generally lean toward a finding that an individual is an employee so they will not be excluded from claiming workers' compensation benefits. In many states there is even a presumption in favor of employee status such that the court presumes an individual is an employee and the employer must rebut the presumption with evidence to the contrary. Courts can be so reluctant to deprive a person of workers' compensation benefits that, even when there is an express agreement to forgo benefits as an independent contractor, a court may find enough indicia of employment status that the individual should be eligible for workers' compensation benefits.
Employee or independent contractor?
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