More and more employers are choosing to hire independent contractors instead of traditional employees. What is the difference between the two? And how does your status as an independent contractor impact your ability to receive workers’ compensation benefits?
What Is an Independent Contractor?
You are likely familiar with the concept of a traditional employee: Somebody who works for an employer for a salary or for hourly wages, and often with benefits such as health insurance, retirement accounts, and unemployment benefits.
An independent contractor, however, is a freelancer or self-employed person who is paid to perform services for another person or business. How is that different from an employee?
Independent contractors do not directly work for the company hiring them, so they have more control over how they do the job that they have been hired to do. For instance, they have more freedom to set their own hours than employees do.
And because independent contractors are not employees, the businesses hiring them do not withhold payroll taxes from the money paid to them, and they typically do not receive unemployment benefits if they are terminated from their contracts.
But if an independent contractor is hurt on the job, would he or she be eligible to receive workers’ compensation benefits?
Workers’ Compensation Benefits Explained
Workers’ compensation is a system to provide benefits for all injured employees in the State of Illinois with some exceptions (Chicago Police officers, federal employees, and interstate commerce railroad workers are excluded from this system). Benefits typically include:
- Payment for reasonable medical treatment related to the work injury.
- Temporary Total Disability, or weekly payments that an employee earns while out of work, typically equal to two-thirds of the employee’s weekly earnings.
- An award or settlement for any permanent disability.
Workers’ compensation is a no fault system of benefits. In other words, an employee does not need to prove that his or her employer, co-employee, or anyone else was at fault for the injury. As long as the injury occurred in the course and scope of employment, the employee should be covered.
Rights of Independent Contractors
Because they are not employees, independent contractors are not eligible for workers’ compensation in Illinois.
Some companies use that distinction to their advantage, misclassifying workers as independent contractors so they can avoid workers’ compensation payments, payroll taxes, unemployment benefits, and other expenses. However, in certain cases, these “independent contractors” may still be eligible for workers’ compensation benefits under Illinois law.
Under the Illinois Workers’ Compensation Act, a worker may be found to be an employee even if he or she has signed an independent contractor agreement or receives 1099 income. That is because the Illinois Workers’ Compensation Commission takes a number of factors into consideration to determine whether someone is a genuine independent contractor or actually an employee in all but name only.
Factors for Determining Employee Status
Employees differ from independent contractors because employers have more control over employees and how they do their jobs. But if employers exercise similar control over “independent contractors,” a case could be made that they could be eligible for workers’ compensation benefits in the same way that employees are.
Consider the following examples of control potentially exercised over an independent contractor:
- The contractor is exclusively bound to work for the employer.
- The contractor is given a schedule.
- The contractor receives specific instructions on how to do the job.
- The contractor has to wear a uniform.
- The contractor receives materials or tools from the employer.
In these and other instances, the so-called “independent contractor” may actually be considered an employee eligible for workers’ compensation benefits for his or her injuries.
Chicago Workers’ Compensation Lawyers
As you can probably see, workers’ compensation claims can be complicated, particularly in the case of misclassified workers. If a worker is unable to prove that he or she is actually an employee, that worker may not qualify for the compensation he or she deserves. For that reason, many injured workers find that they benefit from the guidance of an experienced and knowledgeable attorney, like the Chicago workers’ compensation lawyers at GWC Injury Lawyers, Illinois’ largest Workers’ Compensation and Personal Injury law firm.
If you have been injured in the workplace, please contact GWC today to schedule a free consultation with one of our workers’ compensation attorneys. Call our office at (312) 464-1234 or click here to chat with one of our representatives.