Workers Comp and Independent Contractors

The rise of Uber, Amazon, and other tech companies sparked national conversations around how individuals get classified under states' employment laws. Aside from implications for wages and taxation, individuals working as independent contractors have been barred from certain benefits, notably workers' compensation and employer-provided health insurance. With this situation in mind, the following article provides an overview of how independent contractors are treated with regards to workers' compensation eligibility. We also offer guidance on how to go about filing a claim.

Are Independent Contractors Eligible for Workers' Comp Insurance?

No, they are not as they are not employees, whom Maryland law requires to be protected under a business owners' workers' comp insurance plan. That said, some entities attempt to mislabel workers who are in fact employees as independent contractors to deny them benefits, such as WC, overtime pay, and medical insurance. Additionally, we have found that employers sometimes use this tactic to avoid the costs associated with paying for workers' comp insurance. In this case, the Maryland Uninsured Employers' Fund serves as an ad hoc insurance plan.

Whether or not a worker is an employee is not controlled by what name the employers' classification, but by the circumstances surrounding the employee's work. Per guidance provided by the US Department of Labor, an employee-employer relationship is usually distinguished by the following characteristics:

• The extent to which the services rendered are an integral part of the principal's business
• The permanency of the relationship
• The amount of the alleged contractor's investment in facilities and equipment
• The nature and degree of control by the principal
• The alleged contractor's opportunities for profit and loss
• The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor
• The degree of independent business organization and operation

Additionally, the federal advisory goes on to state, "There are certain factors which are immaterial in determining whether there is an employment relationship. Such facts as the place where work is performed, the absence of a formal employment agreement, or whether an alleged independent contractor is licensed by State/local government are not considered to have a bearing on determinations as to whether there is an employment relationship."

What Options Does an Independent Contractor If They Are Injured on the Job?

First, get in touch with a qualified Maryland workers' compensation attorney to verify that you were classified correctly in terms of employment status. They will also confirm what benefits you are entitled to from an employer. It does not matter what contract someone signs or what their employer calls them. The central question as to if someone is an independent contractor is how much control does the employer have over the injured worker. A lawyer will help you ensure this issue gets sorted out.

You will also want to schedule an appointment with a medical professional and hold onto any documents in the event you are eligible to file a workers' compensation claim.