Is an Independent Contractor Covered by Workers' Comp?

Independent Contractor Injury

By Craig H. Love, Lawyer at Metzger Wickersham

Over the past decade, a growing number of workers have quit full-time jobs as employees and have become self-employed as independent contractors. A new term for this is called the gig economy and refers to a self-employed individual who works under contract to provide services to clients.

Independent contractors come in many shapes and sizes. While some contractors charge by the hour for their work, others charge per job or project. We see these workers as dog walkers, rideshare drivers, and an increasing number of techies flocking to the information technology field.

As the gig economy rises and remote work becomes more mainstream, the number of independent contracts steadily rises. According to Forbes, almost one-third of workers have worked for themselves, while 14% primarily work as independent contractors.

Are Independent Contractors Covered by Workers' Comp?

Unfortunately, if you work as an independent contractor for another company, you won’t be covered under their workers’ compensation insurance policy. Therefore, if you’re injured on the job, you won’t receive workers’ compensation benefits as their employees do. In other words, if you are injured on the job, you wouldn’t get any payments for medical bills, lost wages, or rehabilitation services.

How Do I Know If I Am an Independent Contractor or an Employee?

While an "independent contractor" differs from a standard employee, the exact definition of the role is not set in stone.

Generally, a company that contracts with an independent contractor tells the contractor what the scope of work is, but doesn’t have substantial control over how the contractor achieves the desired result. The contractor may use their own materials and have expenses that aren’t reimbursed.

The IRS has a “right-to-control” test that is used to determine whether an individual is an employee or an independent contractor. The IRS says that the facts that provide evidence of the degree of control and independence fall into three basic categories:

  1. Behavioral: Does the employer have the right to control how the worker does the work for which they were hired? If no, then they are characterized as an independent contractor.
  1. Financial: An independent contractor is likely to have:
    • unreimbursed business expenses,
    • an investment in the tools and equipment they use and supply to complete the job,
    • can offer their services and skills required for the job to others,
    • usually paid a flat fee whether by the time or by the job and taxes aren’t withheld.
  1. Type of relationship: An independent contractor is:
    • likely to have terms of an agreement between the parties within a written contract
    • not likely to have employee-type benefits such as paid vacation or health insurance coverage
    • not as likely to have an ongoing permanent work relationship with the client
    • not likely to be a key aspect of the client’s business; they were hired to consult on a specific project because of their type of services and specialized skills. Again, the nature of the work will help define the relationship.

Do Remote Workers Have the Same Rights As In-Office Workers?

Free Case Evaluation from a Pennsylvania Workers’ Compensation Lawyer

It’s important for workers in Pennsylvania to know their rights. Find out whether you qualify for benefits if you have been injured on the job, you may be entitled to recovery.

Contact us or call Pennsylvania’s workers’ compensation attorneys at Metzger Wickersham about your injury for your free consultation to make sure your rights are protected.

We have eight convenient office locations in Harrisburg, Lancaster, Pottsville, Shippensburg, Wilkes-Barre, Williamsport and York. We also have Spanish speakers on staff.

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