Employee or independent contractor? It matters under workers compensation law, P.2Monday, April 25, 2016
Last time, we began speaking about the issue of worker classification—and misclassification—and the impact this can have on entitlement to workers’ compensation benefits. As we noted, businesses are not required to provide workers’ compensation benefits to independent contractors, and a worker who is misclassified as an independent contractors needs to defend his or her rights when this happens.
Challenging employer misclassification before the Workers’ Compensation Board is an important opportunity for a wrongly classified employer to establish entitlement to benefits. The administrative law judges who hear these cases take into account a variety of factors to determine whether the classification is appropriate.
In general, judges who conduct these hearings will consider these and other factors:
- Whether the worker maintains a separate business establishment;
- Whether the worker performs work which is different from the primary work of the hiring business, and whether work is performed for other businesses;
- Whether the worker is bound by a specific contract, for specific work;
- Whether the worker provides all his or her own equipment and materials; and
- Whether the worker has filed business or self-employment income tax returns or has obtained a Federal Employer Identification Number.
For truckers, classification as an independent contractor requires that they transport some goods under their own bill of landing and under their own Department of Transportation Number. Generally speaking, the less control a business has over a worker, the more likely it is that the worker is an independent contractor for whom the business is not required to provide workers’ compensation benefits. Businesses are expected, though, to require other businesses which provide their employees as workers to cover those workers.
Sorting out issues of worker classification is not always easy, depending on the specific relationship between the worker and the company. Those who are concerned that they may have been denied workers’ compensation benefits due to misclassification should consult an experienced attorney to have their case evaluated and to determine their options.