As An Independent Contractor How Do I Collect Workers’ Compensation?

As An Independent Contractor How Do I Collect Workers’ Compensation?

If you’re an independent contractor, one of your major concerns might be whether you can collect workers’ compensation or not. This guide will provide you with a comprehensive answer:

Workers’ Compensation in Illinois

In Illinois, independent contractors are not eligible for workers’ compensation. However, the criteria for a person to be called an independent contractor or an employee (employees are eligible for workers’ compensation in Illinois) are different under Illinois Workers’ Compensation law than in other states. Let’s find out what exactly is meant by independent contractors:

Defining Independent Contractors

Independent contractors are self-employed individuals or freelancers who are temporarily hired by companies to deliver specific tasks without joining them as employees. According to the Internal Revenue Service (IRS), a worker is only regarded as an independent contractor when the employer has the right to direct or control only the outcome of the work and not what work is being performed or how it’s being performed.

In the state of Illinois, there are numerous cases where legitimate employees are wrongly categorized as independent contractors in an attempt to deprive them of workers’ compensation benefits and thereby save significant amounts of money. When such workers get injured or disabled while performing the work they’ve been assigned, they should seek legal representation to claim their rights.

This means that even if you signed an independent contractor agreement and received 1099 income, you may still be considered an employee.

The Robertson vs. Industrial case is a clear example of how a trucker who was referred to as an independent contractor was entitled to workers’ compensation, according to the Illinois Supreme Court ruling.

When Are You Considered an Employee in Illinois?

If following cases, you’ll be considered an employee and are wrongly classified as an independent contractor:

• The employer gave you a work schedule that you are bound to follow; you weren’t given the freedom to set your own hours
• You are exclusively bound to the employer and can’t work for someone else
• You’re provided with a uniform by your employer
• You don’t use your own equipment or materials; your employer provides the tools to you
• Your employer took taxes out of your paycheck
• You were given specific instructions by your employer for how the job needs to be done; you were not allowed to follow your own approach

If your employer claims that you’re an independent contractor, but one or more of the points stated above holds true, you may be considered an employee that qualifies for workers’ compensation benefits under Illinois law.

Questions About Independent Contractors And Workers’ Compensation

 Do Independent Contractors Qualify for Workers’ Compensation?

In the majority of states, independent contractors are generally not covered by workers’ compensation laws. This distinction arises because independent contractors function as self-employed individuals rather than traditional employees. Therefore, they bear the responsibility for arranging their own insurance and benefits. However, it’s important to note that some states have specific exceptions where particular types of independent contractors may qualify for workers’ compensation coverage, potentially based on the nature of their work or the industry in which they operate.

Can Independent Contractors Purchase Workers’ Compensation Insurance?

Yes, independent contractors have the option to purchase workers’ compensation insurance to cover themselves in the event of a work-related injury or illness. This insurance provides essential financial protection, offering medical benefits and wage replacement in situations where they may be unable to work due to injury. In high-risk industries, such as construction or agriculture, independent contractors may be legally required to carry this insurance as part of their contractual agreements, both to safeguard their well-being and to protect the interests of the hiring business.

How Do Businesses Determine Worker Classification?

Correctly classifying workers as either employees or independent contractors is crucial for employers. Misclassification can result in severe legal penalties and financial liabilities. Several key factors guide this classification process:

Control Over Work – Employees typically adhere to company policies and guidelines, working under the supervision of their employer, while independent contractors enjoy greater autonomy, setting their own schedules and methods for completing their tasks.

Financial Independence – Independent contractors are often responsible for using their own tools, equipment, and resources to complete their work projects. In contrast, employees usually rely on materials and equipment provided by their employer to perform their job duties.

Contractual Agreements – A well-defined formal contract is an essential document that outlines the nature of the working relationship. It can provide clarity regarding the rights, responsibilities, and scope of work for both parties, thereby assisting in accurately classifying the worker.

What Happens If an Independent Contractor Is Injured on the Job?

If an independent contractor sustains an injury while performing their work, they typically cannot file a workers’ compensation claim against the hiring company. This is primarily because independent contractors are responsible for securing their own insurance coverage. In the event of an injury, they may need to rely on their personal health insurance or private disability insurance for coverage.

Alternatively, if the injury was caused by negligence or unsafe conditions created by the hiring company, they may have the option to pursue legal action to seek compensation for their injuries and related damages. To mitigate risks associated with workplace injuries, some businesses choose to provide liability coverage or include clauses in their contracts that require independent contractors to obtain and maintain their own insurance.

Should Independent Contractors Consider Additional Coverage?

In addition to obtaining workers’ compensation insurance, independent contractors should also consider other types of coverage that can bolster their financial protection, including:

General Liability Insurance – This coverage protects against claims of third-party injuries or property damage that may occur as a result of their business operations. It is particularly important for contractors whose work involves interaction with clients or the public.

Disability Insurance – This type of policy offers income protection in case of long-term injuries or illnesses that prevent the contractor from working. It can provide financial security during a challenging recovery period.

Health Insurance –  Securing health insurance is crucial for covering medical expenses that are unrelated to work injuries. Independent contractors should explore various health insurance plans to ensure they have adequate coverage in place for general health needs.

Understanding the complexities of workers’ compensation in relation to independent contractors is essential for both freelancers and businesses. Proper classification of workers, comprehensive insurance coverage, and a solid understanding of legal responsibilities can greatly reduce disputes and enhance financial protection in the case of workplace injuries. Taking proactive steps in these areas can ensure a safer working environment and help both independent contractors and businesses thrive

See more on our Illinois Workers’ Compensation FAQs page.

Hire Our Top-Rated Illinois Workers’ Compensation Attorney

Workers’ compensation serves as a vital safety net for employees who experience injuries or illnesses related to their work. However, the situation becomes more intricate when considering independent contractors. Many business owners, freelancers, and independent contractors themselves have pressing questions regarding their entitlement to workers’ compensation benefits and the specific mechanics of coverage in their cases.

However, it can be a big challenge to prove that you’re an employee, not an independent contractor. An Antioch workers’ compensation lawyer can make life considerably easy for you. Hire Robert T. Edens, who has 20 years of experience in fighting for the rights of employees. His law firm has recovered millions of dollars for clients up till now.