Are Independent Contractors and Subcontractors Eligible for Workers’ Comp?
Generally speaking, contractors are not eligible for workers’ compensation benefits because they do not have an employer-employee relationship with the company. However, the law recognizes that employers have economic incentives to classify workers as contractors rather than as employees. When a company hires an independent contractor, it need not pay payroll taxes, the mandated minimum wage or overtime. Nor must the company provide meal periods and rest breaks, or reimburse their workers for job-related expenses. The result is an epidemic of misclassification, where many workers who act as employees are called contractors.
The California Labor Commissioner advises workers that “there is a rebuttable presumption that where a worker performs services that require a license” or “performs services for a person who is required to obtain…a license, the worker is an employee.”
A court will look closely at the facts of the relationship between employer and worker to make a status determination. The most important factor is the degree to which the employer can exercise control over the worker regarding “the work done, and the manner and means in which it is performed.” Other factors a court might consider include:
- Whether the worker’s occupation or business is distinct from the employers
- Whether the work is part of the employer’s regular business practice
- Whether the worker or the employer supplies the tools to do the job
- Whether the worker or the employer invests in the supplies to do the job
- Whether the work requires specific skill
- How closely the work is supervised
- The worker’s potential to realize a profit or loss depending on the quality of the work
- The length of time spent working
- The degree of permanence of the working relationship
- The method of payment
It’s important to understand that even if your employer takes out no payroll deductions and provides you with a 1099 for your taxes, you may still have standing as an employee for workers’ compensation due to these factors. To learn more about your workers’ compensation eligibility, consult a knowledgeable Orange County attorney at the Tous Law Group. Call 714-602-4473 or contact our office online to schedule a free consultation.