If you are an independent contractor, then you may already be aware that you are not covered by workers’ compensation when you work for a client. However, you may also know that many people are misclassified as independent contractors when they are not. People who are misclassified may be able to seek workers’ compensation from their employers, even if the employer has previously stated that they were independent contractors.
Employers who are responsible for paying workers’ compensation are required to buy it and have it on hand for their employees. This is an additional cost for a business, which may be a reason why many turn to independent contractors for labor. With independent contractors, there are fewer benefits offered, saving the client (or employer if improperly classified) money.
How do you know if you’re misclassified as an independent contractor?
An independent contractor is defined as someone who provides goods or services under the terms of a contract that states the expected work outcome but does not specify how the contractor provides those goods or services. The contractor is only subject to the employer’s guidance or control in relationship to the agreement that they have signed.
Usually, independent contractors have control over their workflow. For example, a writer may be contracted to write articles for a company but has complete control over when they do them and how they do them, so long as they get them turned in on time and meet the standard that was discussed.
Perhaps not surprisingly, many people are misclassified as independent contractors when they are actually employees. The Internal Revenue Service determines if you are an independent contractor by looking at three primary things:
- The behavior of the company
- Does the company control how the worker does their job?
- The financial aspects of the relationship
- Only an independent contractor can receive profits or losses from the work
- Are business aspects of the job controlled by the payer?
- The type of relationship that is maintained
- Is there a contract? Does the worker receive benefits or provide services that are a key aspect of the business?
As you can see from these simple questions, it’s fairly easy to tell an independent contractor from an employee and to see if you’ve been unfairly classified as an independent contractor when you should have protections as an employee. Your attorney can help you assert those rights if you’ve been misclassified.