Workers Compensation: Independent Contractor vs. Employee
Collecting Workers Compensation:
Independent Contractor vs. Employee.
Employers are required by law to carry workers’ compensation insurance for their employees. However, businesses do not have to provide independent contractors with workers’ compensation insurance.
As Orange County’s leading workers compensation law firm, our attorneys have seen many case where an employer wrongfully tried to deny workers compensation benefits to an injured employee, by claiming that they were an independent contractor.
In this article our Orange County workers compensation attorneys discuss who is an employee and who is an independent contractor for purposes of collecting workers compensation.
Independent Contractor versus Employee: Not up the Employer
Unscrupulous employers will often improperly classify their employees as independent contractors to avoid the responsibility of paying payroll taxes, minimum wage, overtime, and workers’ compensation benefits.
In these cases the employer may even have the worker sign a document stating that they agree to be classified as an independent contractor.
However it is not up to the employer to decide if you are an employee or an independent contractor. In other words, if a worker meets the legal requirements of being an employee, the employer cannot “get around the law” by simply calling the worker an independent contractor – even if the worker has signed an agreement.
Who Decides if I am an Employee Entitled to Workers Compensation?
Unfortunately, there is not a set definition of the term “independent contractor” – so interpretations of the courts and enforcement agencies must be relied upon to decide if in a particular situation a worker is an employee or independent contractor. In California the Division of Labor Standards Enforcement (DLSE), is the agency tasked determining whether the wage, hour and workers’ compensation insurance laws apply.
In most cases an “economic realities” test set forth by the California Supreme Court in the case of S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989) will be used. In this test, the most significant factor to be considered is whether the employer has control or the right to control the worker in regard to the work done and the manner and means in which it is performed.
Ten additional aspects of the working relationship that will be researched and analyzed to determine if a worker is an independent contractor or an actual employee.
- Is the worker engaged in an occupation or business distinct from the employer?
- Is the work part of the “regular business” of the employee?
- Does the worker supply their own tools and location for doing the work?
- Does the worker have an investment in the equipment or materials used?
- Do the services rendered requires a special skill?
- What is the kind of occupation, and is that type of work usually done under the direction of an employer or by an independent specialist without supervision?
- Does the employee have an opportunity for profit or loss depending on their managerial skill?
- What is the length of time for which the work is to be performed?
- How permanent is the working relationship?
- Is the employee paid by time or by the job?
Orange County Workers Compensation Attorneys
If you were injured at your place of employment – but were wrongfully denied benefits because the employer claimed you were an independent contractor – it is in your best interest to discuss your case with an experienced Workers Compensation attorney.
A skilled Workers Compensation attorney will be able to help you assess whether you should have been considered an employee – and they can help you prove that you deserve workers compensation benefits.
Employers face significant liabilities and penalties if a worker is treated as an independent contractor and later found to be an employee. (Additionally, an employer cannot ask employees to help pay workers compensation insurance premiums, nor can they legally deduct workers compensation premiums from the employees’ wages.)
Our Workers Compensation Attorneys have helped thousands of individuals across Orange County and Southern California obtain the Workers Compensation benefits they deserve.