How Does Workers Compensation Work for Independent Contractors?

How does workers’ compensation work for independent contractors? What happens if you’re hurt on the job?

If you’re classified as an independent contractor, you need to know the answer to this question.

Today, the lawyers at Casper & Casper are going over workers’ comp for independent contractors. Keep reading to learn everything you need to know!

What Is an Independent Contractor?

Both independent contractors (also called freelancers or gig workers) and employees both perform work for a company. However, they are treated differently under employment and workers’ compensation law.

Here are a few key differences between employees and contractors:

Treatment Under the Law	Employee	Contractor
Hiring Practice	Applies for a position and accepts a job offer from employer.	Interacts with a specific person or department about a service or task, then completes a proposal and enters into a contract.
Job Duties	Employer decides, how, when, where the work is done.	Independent contractor decides how, when, and where the work is done.
Taxes	Employer withholds taxes and pays half of employee contribution to Social Security and Medicare. Employee receives a W-2.	Independent contractor responsible for paying all taxes, including contribution to Social Security and Medicare. Independent contractor receives a 1099.
Payment	Employee is paid an hourly rate or salary at formally defined regular pay periods.	Independent contractor is paid after sending the company an invoice.
Benefits	Generally is offered health insurance, vacation, PTO, etc.	Responsible for their own health insurance and is not offered vacation, PTO, etc.
Employment Law	Covered by employment law	Not covered by employment law
Workers’ Compensation Law	Covered by employer’s workers’ compensation insurance	Not covered by company’s workers’ compensation insurance

How Do I Know If I’m an Independent Contractor?

The table above gives a rough outline of the difference between employees and independent contractors. However, there are gray areas.

Depending on the employment relationship, you might be an employee—even if you work remotely, received a 1099, or signed an “agreement” stating you’re an independent contractor.

Many employees have been misclassified as independent contractors—which cheats them out of the benefits and workers’ compensation coverage they’re entitled to. (In fact, some employers take advantage of the gray areas to illegally misclassify employees on purpose to save money.) To learn more, read our previous post about worker misclassification.

Workers’ Compensation for Independent Contractors

When you’re not an employee of a business, you’re not covered by the business’ workers’ compensation insurance. You aren’t eligible to file a workers’ comp claim under their policy, even if you were injured while doing a job for them or on their property.

Independent contractors aren’t covered by workers’ compensation, unless they self-insure.

That’s because workers’ compensation is a system that promises employees coverage for a work-related injury or illness, and in exchange, prohibits employees from suing their employer. Since independent contractors are self-employed, they are responsible for their own workers’ compensation.

If you are a sole proprietor—meaning the only employee of your own business—you can obtain workers’ compensation for yourself through the Ohio Bureau of Workers’ Compensation. However, it is optional, so many independent contractors don’t.

What Are Your Options If You Don’t Have Workers’ Comp?

If you do not carry workers’ compensation for yourself as an independent contractor, what are your options?

When you aren’t able to get workers’ compensation benefits as an independent contractor, it’s tough.

Since your injury prevents you from working, your income might dry up. You might burn through your savings supporting yourself. Your health insurance might not cover all the bills resulting from your injury. As a result, you might find yourself struggling financially.

However, you do have another option: a personal injury claim.

Depending on the circumstances of your injury or illness, you may be able to file a personal injury claim against the employer or a third party.

If you are injured because of the employer’s negligence, you can hold them financially responsible for the cost of your injuries. For example, an employer could be at fault if the workplace’s dangerous conditions or faulty equipment caused your accident.

A personal injury claim can be an option even in cases where the employer wasn’t at fault. For example, if you were injured in a car accident while driving to your next job, you could file a claim against the at-fault driver.

Successful personal injury claims can cover much of the same losses that workers’ compensation does—like medical bills and lost wages.

Need Workers’ Comp Help? Call Casper & Casper

Casper & Casper is here to help you.

If you have questions about your case, including whether or not a workers’ comp or personal injury claim is available to you, we’d be happy to answer them. We’re here to help you understand your options and decide on the best course of action.

Call us today to schedule a free initial consultation.