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Independent Contractors Can Face Unfair Workplace Injury Claim Denials Due to Employment Status Confusion

By Brown Moore

February 25, 2016

Home News & Resources Independent Contractors Can Face Unfair Workplace Injury Claim Denials Due to Employment Status Confusion

No profession is absolutely accident-or illness-free, which is why the North Carolina workers’ compensation program is so important. This system helps ensure medical support regardless of whether workers sustain injuries because of their own innocent mistakes or because employers fail to address unsafe conditions in the workplace.

Unfortunately, independent contractors do not benefit from workers’ compensation benefits from the companies they work for even though they are often hired to perform some of the most dangerous jobs. However, the definition of an independent contractor is very specific.

Each Charlotte workplace injury attorney at our firm has seen numerous unfair claim denials simply because the employer incorrectly classified someone as an independent contractor. Individuals who believe they are independent contractors should learn more about the legal definition before giving up on workers’ compensation benefits after workplace injuries.

1099 Earnings Do Not Automatically Constitute Independent Contractor Status

Employers enjoy many economic benefits by hiring independent contracts to serve certain functions rather than hiring in-house workers to perform the tasks. Of course, keeping those workers off of the workers’ compensation rosters is one of those benefits.

To solidify the independent contractor relationship, companies pay for services on a 1099 basis rather than using W-2s and they commonly execute independent contractor agreements with these workers. When workplace injury claims are denied, however, the application of a common law test determines if the injured worker is truly an independent contractor.

The test results may not always be fully consistent from one case to the next, but many conditions such as the following can help determine if a worker is judged to be an employee or an independent contractor, which determines eligibility for workers’ compensation benefits:

  • Whether the services performed are an integral part of the hiring company’s business
  • Whether the relationship is relatively permanent, versus just on an occasional, as-needed basis
  • Whether the worker has significantly invested in facilities and equipment used to perform the services
  • Which party exercises primary control over the services, including (but not limited to) such issues as who determines how the work is performed, control over the work schedule, and whether the worker can bring in additional staff
  • The worker’s opportunity for profit and loss

These tests may be somewhat subjective, but the results can easily outweigh any formal contracts signed by workers and employers — particularly when it comes to paying for on-the-job injuries through the workers’ compensation system.

Independent Contractors Still Have Options for Getting Claims Paid

Keep in mind that one of the main benefits of workers’ compensation is that, with limited exceptions, it pays for workplace injuries without concern over liability issues. However, when an independent contractor sustains injuries on the job — and the cause of the injuries points to negligent or willful actions on the part of the hiring company — liability issues can easily come back into play. In these cases, independent contractors can pursue compensation through personal injury claims.

An experienced NC workers’ compensation lawyer can help ensure that the correct employment status is used when determining the validity of a workplace injury claim. With skills in civil personal injury claims, that same lawyer can use other legal options to help protect rights to compensation. Call us at 800-948-0577 or use our convenient online contact form to learn more about your rights and how to protect them.