Friday F.A.Q.: “Is an Independent Contractor Entitled to Workers’ Compensation Benefits?”

Tashia Rasul, Esq.
Tashia Rasul, Esq.

Employees are entitled to workers’ compensation benefits, while independent contractors are not.

An employer would concede a claimants’ employment status when he is clearly an employee, but there are times when an employer would hold out that a claimant is an independent contractor. In these situations, workers’ compensation benefits are denied, and the Court would be tasked with making a determination of whether the claimant is an employee or an independent contractor.

So, how is this done?

The Board has set forth ten (10) factors for determining whether a claimant is an independent contractor, and it expects that all of them are considered by the Court. They are:

  • Who controls the time and manner in which the work is to be completed?
  • Does the claimant have a Federal Employer Identification Number, or did he file a business or self-employed income tax return?
  • Does he maintain a business establishment that is separate from the alleged employer?
  • What kind of work does he perform (is it different from the primary work of the alleged employer), and does he perform work for other businesses?
  • Does he operate under a contract with the alleged employer?
  • Did he obtain a liability insurance policy under his own business name?
  • Does he have recurring business liabilities and obligations?
  • Does he have a business card that advertises his own business, and not that of the alleged employer?
  • Does he provide all of the equipment and materials necessary to perform the job he was hired for? AND
  • Does he work under his own operating permit, contract or authority?

While this seems like a straightforward list of factors, determining whether a claimant is an independent contractor is not always cut and dry. This is seen in cases when there is no contract between the claimant and the alleged employer, and there is a lack of documentary proof that the claimant has his own established business.

When this happens, the Court must delve into the nature of the alleged employer’s control over the claimant and the work performed. Some things the Court looks at in determining control are any glaring evidence of the right or exercise of control, the method of payment, who furnishes the needed equipment and who has the right to terminate the claimant. See Winglovitz v. Agway, Inc., 246 A.D.2d 684, 685 (3d Dept. 1998). If the Court finds that the alleged employer exercised significant control over the claimant, it will likely find that he is an employee, and not an independent contractor, and is entitled to benefits.

Therefore, to prevent potential liability even when the claimant is hired as an independent contractor, employers should ensure that there is a written contract documenting all terms and conditions of the hiring and obtain all pertinent information about the claimant’s business at the time of hiring.

Tashia Rasul is an Partner at Lois LLC where she defends employers and carriers in New York workers’ compensation claims. Tashia chairs the Firm's Diversity Committee and is active in the national Alliance of Women in Workers' Compensation. She can be reached directly at trasul@lois-llc.com or 201-880-7213.