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Can independent contractors get workers’ compensation?

On Behalf of | Oct 31, 2024 | Workers' Compensation

The short answer is no. As an independent contractor, you cannot receive workers’ compensation from your client or customer. Instead, you must file a Notice of Designation as Independent Contractor. However, as an independent contractor, you are responsible for your own workers’ compensation insurance, so in a sense, you do get workers’ compensation. You are just the one paying for it.

Misclassified as an independent contractor

However, your “client” may misclassify you as an independent contractor. The Department of Labor recently issued a Final Rule regarding identifying whether a worker is an independent contractor or an employee. The rule provides six factors the department uses in evaluating whether someone is an employee or an independent contractor.

  • Opportunity for profit and loss: Employees will have no profit and losses—just a fixed salary.
  • Financial stake and invested resources: A contractor will have significantly invested in their equipment and business, while an employee will have theirs provided by their employer.
  • Permanency of the work: A contractor will work with a client for a defined period, while an employee will work permanently.
  • Degree of control of employer over how a person works: A contractor has free rein on the conditions of their working environment and how to do their work. Employees have certain limitations, such as when to report to work, how much work to do and other work conditions they have no control over.
  • Needs of the business: If the work is essential to the employer’s business, the worker may be an employee. The worker may be a contractor if the work is seasonal or non-essential.
  • Worker’s skill and initiative: If the worker acts more like a businessperson than an employee (they seek out clients, market their services and make crucial business decisions), the law is more likely to classify them as independent contractors.

If you believe your “client” has misclassified you as a contractor and you should receive workers’ compensation, consider contacting a lawyer to help you understand your situation.