What does Independent Contractor mean?
The definition of "independent contractor" is a bit nebulous. In fact, there are common law principles, information from the Fair Labor Standards Act, and decisions from some courts which have all attempted to define when a worker is considered an "independent contractor." Although there is still some disagreement the general factors which make a worker an independent contractor are as follows:
- The worker supplies their own materials, tools, and equipment to perform their job.
- The worker has control over their work product and they, not their employer, decide how the work will be done.
- The worker does not receive a steady paycheck and is not on the employer's payroll.
- The worker can be discharged at any time.
- The worker establishes their own schedule without fear of discharge.
- The worker controls their own hours of employment.
- The worker performs temporary work for the employer.
Other factors which have been considered by the court in their determination of independent contractor status include whether the person gains a large portion of their salary from one business, whether their business pays for their Social Security taxes and other employee benefits, and what type of skill is required to perform their job. Additionally, an independent contractor is not subject to control from the business except for specific tasks or jobs as determined by a mutually binding contact.
Workers' Compensation and Independent Contractors
Independent contractors are not eligible for workers' compensation coverage. But it is not uncommon for some employers to misclassify certain workers as independent contractors to lower their work compensation insurance bill.
If you are injured and your employer has classified you as an independent contractor you will not be covered by workers' compensation insurance. But there are some cases where you may have the legal right to challenge this classification. If after reviewing the information above you have questions about your legal right to workers' compensation, talk to a work comp lawyer.