No matter whether you are employee or an employer, understand the distinction between an independent contractor and employee status. In order to be entitled to workers’ compensation a person must be considered an “employee.” Sometimes, employers attempt to avoid certain tax and insurance obligations by claiming that their workers are independent contractors and therefore not entitled to workers’ compensation. This is a very complex area of the law but generally, the courts favor a determination of employment status rather than an independent contractor.
Employers who attempt to avoid liability in this manner due so at their own peril and should not do so without obtaining a competent attorney’s advice. When the courts make this determination, they look to many factors. Some factors include the nature of the work; the skill required for performance; the terms of any written agreement; whether the work being performed is distinct from the employer’s occupation or business; the terms of payment; who supplies the tools and equipment; the right to control the means and methods for performing the work; and the right to terminate the employment at any time. No single factor will carry the day but rather, the court will look to each situation on a case by case basis.
Don’t wait for a claim
As an employer, if you are relying on a court to determine that your workers are independent contractors, you are risking the possibility that you will be sued by one of them if they are injured.The costs to defend a claim will exceed the expense of insurance.
As an worker, the bottom line is that you should not hesitate to contact an attorney even if your employer calls you an “independent contractor.”