Whether you’re an employee or an employer, understanding workers’ compensation and knowing how to access it in the event of an injury is essential. According to an Orange County workers’ compensation attorney, it provides the critical support needed during a challenging time, especially for those who have been injured in a work-related incident. But what happens when independent contractors face similar risks and need coverage? Unlike traditional employees, independent contractors face unique challenges regarding workers’ compensation.
Most independent contractors are often excluded from traditional workers’ compensation coverage, sometimes making them face many challenges. These consequences can include:
- Not maximizing benefits
- Inability to Challenge a Denied Claim
- Financial Hardship
- Denial of Benefits
- Failure to File a Timely Claim
This article explores the legal considerations for employees and independent contractors, highlighting the specific difficulties independent contractors encounter when seeking coverage.
Contents
Independent Contractors vs. Employees: Key Differences
When it comes to independent contractors in California, there is a distinction between them and an employee under California Law, which is determined by the ABC test. The three prongs of the ABC Test are:
“A” Test: Control Over the Work
This is when the worker is free from the control and direction of the hiring entity or employer in connection with the performance of the work. If the company controls what the worker does, it most likely means they are an employee. Independent contractors usually have more autonomy and flexibility in how they do their work.
“B” Test: The Worker Performs Work Outside the Employer’s Usual Course of Business
The worker performs work that is usually outside of what the hiring company or entity does business as. If tasks are not aligned with the hiring entity’s main jobs and responsibilities the worker can be considered an independent contractor.
“C” Test: Customarily Engaged in an Independent Trade, Occupation, or Business
However, if the worker is engaged in an independent established trade, occupation, or business of the same nature or tasks of the hiring entity. If they commonly work for other clients and have their own businesses, then they are most likely considered independent contractors.
Are Independent Contractors Eligible for Workers’ Compensation?
The general rule, when it comes to workers’ compensation eligibility for independent contractors is that they are not automatically covered by workers’ compensation, unlike permanent employees. Although, there are some cases where independent contractors may be eligible. These can depend on the industry or if they are considered statutory employees.
Some industries where independent contractors may be more likely to receive workers’ compensation benefits are more “high-risk,” such as:
- Construction
- Agriculture and Farm Work
- Transportation and Delivery (Rideshare, Trucking)
- Entertainment (actors, musicians, stunt performers)
- Health Care
- Manufacturing and Warehouse
How to Protect Yourself as an Independent Contractor
There are a couple of ways that you can protect yourself as an independent contractor. When it comes to contractual considerations, it is important to clearly define the terms of your contract. This can be specifying workers’ compensation coverage responsibilities. It is also encouraged for independent contractors to negotiate for workers’ compensation coverage with employers or clients. By also obtaining personal coverage, can help protect yourself as an independent contractor. Purchasing your own workers’ compensation can help you in being proactive in case any work-related injuries may arise.
What to Do if You Are Injured as an Independent Contractor
If you are injured as an independent contractor, it is important to ensure you get the care and the compensation you need. If injured, report the injury immediately, even if you are not covered by workers’ compensation, and keep thorough records of the injury. This includes both medical treatments and communications with clients and employers. This will help you when trying to file for workers’ compensation.
If you are not eligible for workers’ compensation, however, exploring alternative compensation routes, such as personal injury lawsuits or other insurance options, can be another avenue as an independent contractor. When navigating disputes with clients or employers over coverage, this can challenge misclassification or seek coverage in case of disputes with employers or clients.
The Future of Workers’ Compensation for Independent Contractors
While challenges related to workers’ compensation and the misclassification of employees continue to persist, ongoing legislative efforts in California aim to expand workers’ compensation coverage to independent contractors. Key initiatives like AB 5 (Assembly Bill 5) and AB 2257 have been central to this effort. As additional legislation is introduced, we can expect further developments in California’s workers’ compensation laws that may impact independent contractors, potentially broadening their access to important benefits and protections.
Being Proactive for Workers’ Compensation
Independent contractors must be proactive in understanding their legal rights regarding workers’ compensation to ensure they receive the necessary support during difficult times. By regularly consulting with legal professionals, they can stay informed about their rights, verify that they are properly classified, and ensure they have the coverage they need. This ongoing awareness and guidance can help independent contractors secure the full support and compensation they deserve.
