Working on a 1099: Are You Eligible for Workers’ Comp?

Uber driver. Freelance programmer. Handyman for hire. Instacart worker. If your job is one of these positions, or something similar, and you receive a 1099 form, you’re part of the “gig economy.”

The gig economy is huge right now. More and more companies are offering temporary, flexible jobs (also called “gigs”) and hiring independent contractors over employees. In fact, the Pew Research Center found that in 2015 nearly a quarter of Americans earned money through some kind of freelance work.

Gigs are popular because of the freedom and flexibility they offer. However, there are some downsides. The specific downside we’re talking about today is a lack of workers’ comp. What happens if you are injured as a freelance worker?

Keep reading to learn more about this important issue.

Contractors vs. Employees

While both independent contractors (also called freelance or gig workers) and employees both do work for a company, the similarities end there.

Contractors are, basically, their own boss. They get to choose when, where, and how they work, as well as what projects to take on. Employees, on the other hand, have a boss who tells them when and where to show up for work and what to do.

For example, a freelance programmer might write programs for a variety of different companies, while an employee will write programs just for their employer.

Also, as the “boss,” contractors pay their own taxes, including the employment portion of Social Security and Medicaid taxes. Contractors receive a 1099 form from their clients, while employees will receive a W-2 from their employer.

In addition—and this is important—contractors are not covered by the employment and labor laws that cover employees. Contractors do not receive any of the benefits that employees do. These benefits include:

• Health insurance (medical, dental, vision, etc.)
• 401(k)
• Vacation
• PTO
• Disability and life insurance
• Training
• Workers’ comp

Instead, contractors are responsible for providing their own benefits. Essentially, they are expected to save and plan to cover their health insurance and any future emergencies—including work-related accidents and injuries.

So, how do you know if you’re a gig worker? Is it when you get a 1099 from a company? As we’ll explain below, not exactly.

Worker Misclassification

Ideally, freelance jobs should benefit both the worker and the company they work for. The freelance worker gets to be their own boss. Freelance offers a lot more flexibility than your traditional 9-to-5 job. In return, a company gets to save a significant amount of money on labor costs. The company has more flexibility in hiring, adding independent contractors only when they need them for specific projects and can afford them.

When freelance jobs work as they are supposed to, there is no problem.

Unfortunately, some companies take advantage of the freelance model. Because there isn’t a simple test separating employees from independent contractors, these companies see dollar signs in the gray area. They unethically and illegally classify actual employees as independent contractors, saving big on the cost of benefits like workers’ comp. As a result, when the so-called “independent contractor” is injured at work, he or she is left out in the cold.

Because worker misclassification is common, it’s important to know your rights. Even if you received a 1099—if you are actually an employee, you are entitled to workers’ compensation.

If you sustained a work-related injury or illness and think you might have been misclassified, it’s a good idea to talk to a workers’ comp attorney. An experienced, qualified attorney can help you prove that you are technically an employee who deserves workers’ comp.

However, what if you know you are a freelance worker? What are options after a work-related injury?

When You Aren’t Covered by Workers’ Comp

When you aren’t able to get workers’ compensation for a work-related injury or illness, as a freelancer, it can be tough.

You aren’t able to continue working for yourself, and you can’t earn a steady income. Your health insurance might not cover all the medical bills that come pouring in. As a result, you end up in an incredibly stressful place, struggling financially, when you should be focusing on your recovery.

This might sound bleak, but fortunately, you do have options.

When you’re working on a 1099 and you can’t get workers comp, there are a few other avenues open to you:

• You can file a personal injury claim against your employer. If you’re injured on the job, you can file a personal injury claim against your employer. A personal injury claim is an option if your employer is at fault for your injury—say, if your workplace’s dangerous conditions or faulty equipment caused an accident, for example.
• You can file a personal injury claim against a third party. A personal injury claim is an option even in cases where your employer isn’t at fault. For example, let’s say that you were driving to get to your next gig, and another driver hits you, causing injuries. In this case, you would be able to file a personal injury suit against the other driver to cover the cost of your injuries.

We’re Here to Help

The workers’ comp attorneys at Casper & Casper are here for you.

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

Call us today to schedule a free initial consultation by phone or video.