Raleigh Independent Contractor Injury Lawyers
Companies these days are increasingly hiring independent contractors rather than full-time employees, generally in a bid to cut costs both in wages and benefits, and to avoid having to pay out workers’ compensation benefits.
However, just because your company classifies you as an independent contractor does not mean that a court will do the same. Instead, the court will consider the circumstances of your employment and make a determination about whether you are really an independent contractor or actually a misclassified employee.
This could be crucial for you if you are fighting to get workers’ compensation as an injured independent contractor. You may be eligible for benefits if the court thinks you are actually a regular employee who was misclassified as an independent contractor.
If you are classified as an independent contractor and have been injured on the job, you may have more options than you think for paying for the expenses associated with your injury. Email us or give us a call today to talk through your options. The attorneys at Younce, Vtipil, Baznik & Banks, P.A., have years of experience with helping clients with workplace injury claims in North Carolina.
Why Classifying You as an Independent Contractor Means Savings for Your Employer
There are a number of reasons why companies choose to hire workers as independent contractors rather than employees — but many times, the classification they choose will not hold up.
Companies save significantly when they hire independent contractors, and independent contractors often underestimate how much money they lose by working as an independent contractor rather than an employee.
Companies save when they hired employees as independent contractors by not having to pay:
- Their half of your Social Security and Medicare taxes. Independent contractors pay 100%. Employees pay only 50%, and the employer contributes the other 50%.
- Unemployment insurance. Independent contractors are ineligible for employer-paid unemployment benefits.
- Workers’ compensation insurance. Independent contractors are not eligible for workers’ compensation.
- Minimum wage, overtime, sick pay and mandatory breaks.
- Healthcare coverage. Independent contractors are ineligible for healthcare coverage as an employee under the Affordable Care Act starting in 2014.
When businesses do not have to pay their half of payroll taxes, such as Social Security pension contribution and Medicare tax, the savings are significant. According to the Internal Revenue Service, these payroll taxes accounted for 15.3 percent of gross wages in 2013 and 2014.
Some industries, like trucking and construction, have more savings than others when it comes to other benefits such as disability insurance and workers’ compensation. This creates somewhat of an incentive in those industries to lean toward hiring independent contractors rather than employees.
Workers’ compensation insurance premiums vary between companies and industries, costing more for companies and industries that tend to have more claims and more serious injuries. Industries that tend to pay higher premiums also have greater incentives for avoiding workers’ compensation entirely. For example, workers’ compensation premiums for a dangerous occupation like roofing could cost more than 50% of payroll.
Hiring workers as independent contractors also creates savings for employers by avoiding complying with the Fair Labor Standards Act and state requirements for minimum wage and overtime. It also allows businesses to hire undocumented workers without being liable for verifying immigration status or incurring penalties for employing undocumented workers.
Are You an Independent Contractor or Actually a Misclassified Employee?
Under federal law, workers are either employees or independent contractors. Which one is which is determined by a number of factors considered as a whole. In general, independent contractors determine their own schedule, control their work product, provide their own supplies, etc. An employee uses company resources and has their schedule set and controlled by the company.
There have been some prominent cases in the last few years dealing with the designation of independent contractor vs. employee. The most notable example is the FedEx Ground case. FedEx Ground has for years classified and paid their drivers as independent contractors, while requiring them to wear a uniform and adhere to a certain schedule, exercising a great deal of control over their work. They settled a class action recently in Oregon for $15.4 million, but their total cost for misclassifying workers is close to $500 million.
Uber, Lyft, and Amazon have also faced similar troubles in court for classifying their workers as independent contractors rather than employees.
There is not a bright-line rule for determining whether a worker is an independent contractor or an employee, but a number of factors are taken into consideration, such as:
- The permanency of the business relationship
- The degree to which the worker invests in equipment or materials
- The degree of control by each side
- Whether the services provided are an integral part of the business
- The worker’s involvement in profit and loss
- The degree to which the worker has an independent business organization or operation
Other factors have no bearing on the determination of independent contractor vs. employee, such as time and method of payment, the worker’s licensure, and absence of a formal independent contractor agreement.
Workers Compensation For Independent Contractors & Other Legal Options
If you have been hurt on the job as an independent contractor, you may be wondering if you have options for paying for your injuries or if you will be stuck footing the bill yourself. You do have options, and we can help you. There are a number of options you may have for covering expenses for your injury.
If you are an independent contractor hurt at work you can:
- Apply for workers’ compensation and appeal the denial, if denied
- Potentially file a personal injury lawsuit
- If disabled, file for Social Security Disability benefits
How Our Raleigh Work Injury Law Firm Can Help
If you have been injured at work and you have been classified as an independent contractor, don’t give up just yet. You may have options for getting compensation for your injuries. Many who work at a job where on-the-job injuries are common are incorrectly classified as independent contractors, when they are actually regular employees. If that is the case with you, you may be eligible for workers’ compensation for independent contractors.
You may also have other recourses for receiving compensation for your injuries, even if a court or insurance board does not consider you to be misclassified, so it is worth your peace of mind to talk to us today. We will walk you through your options and fight for you every step of the way to seek the compensation that you deserve.