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Workers' Compensation: Are You An Employee or An Independent Contractor?


One requirement to become eligible for workers' compensation is that, the worker should be classified as an employee. As you may already have known, not all workers are classified as employees – at least in legal terms. An example of a type of worker that is not covered by workers' compensation is a freelancer, or generally, an independent contractor. Basically, they are not covered by workers' comp because they are not covered by employment and labor laws. They also operate separately from the company or employer they work for.

Now, most people know if they are an employee or independent contractors. So, this article is not about figuring out whether you are an employee or an independent contractor – you probably know it already!

This article is written because some employers have the malpractice of misclassifying some of their employees as independent contractors to avoid paying the necessary dues to their employees – including the giving of privileges of being covered by workers' compensation to their employees, among other benefits.

Your employer may tell you that you are an "independent contractor" when you actually work as an "employee".

If you are in this situation, it's important to know what classifies a worker either as an employee or independent contractor.

You are not classified by what your employer labeled you!

Regardless of what was told to you, you won't be classified based on what your employer labeled you. So, your boss telling you, "Ah, you're an independent contractor!" isn't enough to classify you as such.

Even written agreements – which you should carefully check – stating that you'll work as an "independent contractor" is not enough to classify you as such. This is another malpractice some employers do to avoid giving full benefits and other required dues to their employees.

How you are classified primarily depends on your relationship with your work and employer. Here are some things to ask if you're wondering whether you work as an employee or as an independent contractor. Answering "Yes" to these means you're more likely to operate as an employee.

Does your employer have more control over what and how you do your job?

Employees are highly managed by their employers. This is one reason why employees work on a set schedule while independent contractors don't – unless they have an agreement with their client.

Independent contractors have the freedom on how they will finish the tasks they have on hand. If the employer want some specifics on how they'll do the work, it should be set between the two before the work will begin, but this is not necessarily the case.

Independent contractors normally also don't have a set schedule, just a deadline for the project.

Does your employer have the final say on how much you'll earn?

Employees are subject to numerous company policies – including, of course, how much you'll earn per month. Basically, employees have little say on how they'll get treated when it comes to factors such as work schedule, amount of salary, how they'll get paid, etc.

Contrast this to independent contractors. Independent contractors can negotiate their price with their clients. They can also negotiate on other factors such as the payment method, the deadline and other factors for the work.

Sure, employees can ask for a pay raise or tell their salary expectations during interview, but employers still have the final say on the matter. You either take it or leave it. However, they can't just set a price to the independent contractor and have them make a "take it or leave it" decision. The independent contractor have a big say on the case, too.

Are you entitled to employee benefits?

Employees, as the word suggests, are entitled to benefits that independent contractors don't have. This is often secured through a written contract.

Employers don't provide benefits to independent contractors – and they don't have to. That's because independent contractors work separately from the employer and his/her company.

Are you secured with your job?

Are you secured with your job in a sense that your relationship in that job is to continue working for it over a long period of time (unless you resigned or got fired/laid off)? If yes, well, you are an employee.

Employees are expected to work to the company or employer for a long period of time. On the other hand, independent contractors are often expected to work only for a short amount of time – usually until the project is finished.

More control or more freedom?

If there is one question that will determine if you are an employee or an independent contractor, it's the question of whether you are more controlled by your employer or you have more freedom over the work?

If your job's nature is more controlled by your employer, then you are an employee. If you have more freedom over the work you have, you are an independent contractor.

Do you need more help?

If you are confused about whether you should be classified as an employee or as an independent contractor, perhaps you need a lawyer to guide you in the matter. LG LAW - Workers Compensation Attorney have the best workers' compensation lawyers that can help you with the matter.

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Thursday, 11 August 2022