Employers are smart and will sometimes try to get past the rules. When it comes to paying out Worker’s Compensation after an injury, this is especially true in some cases. When you are falsely called an independent contractor. and incorrect, there is plenty of information to keep in mind so that if it does happen to you, you are prepared and can fight to get your money.
According to Workplace Fairness:
As with unemployment benefits, an employer is not responsible for workers comp benefits if you are an independent contractor.
However, what if you know that you are not an independent contractor?
A Contract Basis
You have to be specifically classified as an independent contractor and if you never were in the past, the employer cannot simply decide that you are one if you are injured on the job.
There is a variety of ways that reflect that you are not an independent contractor which include the following:
Minimum Wages
Employers must pay employees a minimum wage and overtime wages if they are not considered a contractor.
Payroll Taxes
Taxes must be deducted from an employee’s earnings but with an independent contractor, the taxes are the responsibility of the contractor and must be kept up with accordingly. If your employer has been taking out taxes each payday and supplying you with a W2, then they cannot suddenly decide that you are an independent contractor.
Are There Set Rules Determining a Contractor?
Unfortunately, there are not. However, there are guidelines that you can refer to which will help you determine your status even if the employer is trying to say something different.
For instance, a contractor should either have a contract in writing or a verbal agreement. This is not always the case, though. Sometimes independent contractors are simply given work without anything other than a payment when finished work is presented.
The Guidelines
Even though there are not specific rules, there are guidelines that the IRS and other agencies have to determine an employee. The good news is that the burden of proof is the employer’s responsibility. There are 20 factors by the IRS that are categorized into three areas which provides a good evaluation on what an employee is.
The three categories include type of relationship, behavioral control, and financial control.
Financial Control
- Method of Payment. If you get paid on specific dates and are not reimbursed for expenses, this is indicative of an employee.
- Opportunity for Profit or Loss. If the company loses money, this can affect an independent contractor who has worked on a project.
- Significant Investment. Employees do not have to invest in their own equipment or tools needed.
- Services Available to the Market. This is an example of independent contractors being able to serve multiple entities, advertise, etc whereas an employee typically works for one employer.
- Unreimbursed Expenses. Employees usually do not have reimbursement expenses like an independent contractor.
Behavioral Control
- Evaluation. An end result evaluation is typically indicative of a contractor whereas an employee receives ongoing evaluation.
- Training. Employees are given training while a contractor works on their own.
- Type of Instructions Given. Contractors work their own hours usually and an employee has a set schedule on average.
- Degree of Instruction. The more detail, the more likely you are an employee.
Type of Relationship
- Permanency of the Relationship. Many independent contractors move on once the work is done while employees have an ongoing job.
- Written Contract. A contract is not the final say in whether you are an employee or an independent contractor unless one specifically states so in advance and even then, sometimes it is questionable. Most employers will specifically state if you are independent and in that case, you already knew it; it was not changed due to an injury.
- Employee Benefits. Vacation time, insurance, and sick days are just a few of the benefits that employees get and contractors do not.
- Services Provided as Key Activity of the Business. If your job is key to the company then this is more indicative of an employee relationship. For example, you are hired to move furniture for a moving company and work a regular schedule.
The point is, the employer cannot suddenly decide that you are an independent contractor. This is not legal to do for IRS standards, the Department of Labor, or Workman’s Compensation.
If this does happen to you, you have recourse. At Meshbesher Law Firm, we take claims like these very seriously and are here to help. If you have been injured and your employer is claiming that you are an independent contractor, contact us so we can help you get the help you need.
