Independent contractors cannot get workers’ compensation benefits if they are hurt on the job. According to the North Carolina Industrial Commission (NCIC), the North Carolina Workers’ Compensation Act requires all businesses with three or more employees to carry workers’ compensation coverage, including corporations, sole proprietorships, partnerships, and limited liability companies. Workers’ compensation for independent contractors is not included in this law.
However, what defines a worker as an employee is based on many factors. The Industrial Commission may determine that independent contractors are, in fact, employees, even if their employer designates them as independent contractors to avoid having to make workers’ compensation insurance payments on their behalf.
The Independent Contractor Issue
Employees tend to be more expensive than independent contractors because they are entitled to workers’ compensation coverage. Employers must also pay payroll taxes for their employees and make certain contributions to the state’s unemployment insurance program while complying with many different federal and state laws that pertain to employees.
Some employers try to bypass these costs of doing business by designating certain workers as independent contractors, even though they perform essentially the same tasks as a regular employee. The employer might even provide these workers with a 1099 tax form so that the independent contractor can report non-wage, salary, and tip income as miscellaneous income for IRS tax purposes.
As per the Industrial Commission, employers do not absolve themselves of their obligation to provide workers’ compensation to their employees by simply designating them as independent contractors.
It is common for the Industrial Commission to determine how workers should be classified on a case-by-case basis. The ultimate determinant of whether an independent contractor is entitled to workers’ compensation often comes down to how much control the employer has over the worker’s job tasks.
To make this determination, the Industrial Commission may look at:
- Whether the worker or workers are engaged in independent work of their own
- Whether the employer has exclusive access to the skills, knowledge, or training of the worker in their line of work
- Whether the work performed is compensated on a regular basis, in lump sum form, or using some other form of regular or irregular remuneration
- Whether the worker is typically retained and not discharged after the completion of agreed-upon tasks
- Whether the employer can use the talents and skills of the worker in other areas of the business or on other projects on an as-needed basis
- How much control the employer has over the work performed by the worker in terms of compensation, time spent on work, and the worker’s flexibility to engage in work elsewhere
For a legal consultation, call 828.286.3866
When Independent Contractors Can Get Workers’ Compensation
Based on an investigation by the Industrial Commission, a worker classified as an independent contractor can get workers’ compensation benefits if they meet the definition of an “employee.”
If this happens and the worker has filed a workplace injury claim, the employer may be found liable for covering the worker until they can return to work or all applicable compensatory damages are met. Compensatory damages may include lost wage payments, time away from work, and treatment expenses.
Also, if you are an independent contractor or a sole proprietor, you can purchase insurance for yourself. Personal health insurance policies typically do not cover work-related accidents and injuries, but you can purchase coverage for work- or job-related accidents, even if you work alone or as a contractor. That way, you are covered in the event of a work-related mishap.
If it is determined that you are entitled to workers’ compensation but your employer did not agree to pay for your medical treatment, you may still be able to obtain the compensation you need. However, you should request approval from the Industrial Commission first. In general, you are only eligible for compensation if you miss more than 21 days of work, and compensation is based on two-thirds of your average weekly wage.
You can receive lost-time weekly benefits until you can return to work, but you may receive permanent partial disability payments if you suffered a total or partial disability. To have a total or partial disability, you must have lost the use of a body part or function, and this loss prohibits you from earning the same wages you used to earn before your injury.
The Industrial Commission determines whether a given disability qualifies as a permanent partial disability. If your employer refuses to acknowledge a valid claim, the Industrial Commission, the claimant, or the claimant’s attorney must be notified of the reason for the denial. Eligible employees or contractors may request a hearing with the Industrial Commission by submitting a Request for Hearing form, at which point the Commission will investigate the case and come to a determination about your claim.
Contact Farmer & Morris Law, PLLS Today
Contact Farmer & Morris Law, PLLC today at (828) 286-3866 for a free case evaluation. If you work as an independent contractor but perform tasks and duties in line with full-time employees, you might be entitled to workers’ compensation benefits. Call us today to discuss your case.