In this article, you can learn about:
- Ways independent contractors can qualify for workers’ compensation in North Carolina.
- The distinctions between independent contractors and employees in North Carolina.
- What to do if your employer wrongfully classifies you as an employee.
What Are The First Steps I Should Take After An Injury At Work As An Independent Contractor To Determine If I Am Eligible For Workers’ Compensation?
If you’re an independent contractor, then you are responsible for your own workers’ compensation coverage. Business owners are only required to have coverage if they employ three or more individuals. If you are not employed, the Workers’ Compensation Act does not apply to you.
In these cases, the bigger issue is whether you are actually considered an independent contractor under the law. Just because you call yourself an independent contractor or your employer classifies you as an independent contractor does not mean you really are one.
How Can You Determine If You Are Actually An Independent Contractor Under The Law?
The state of North Carolina, the IRS, and the federal government all have factors that try to help you determine whether you are an independent contractor. It all comes down to control. If you have your own tools, your own vehicles, and you’re getting paid by the job, then you probably are an independent contractor.
On the other hand, factors that indicate you might be an employee rather than an independent contractor include:
- You’re using someone else’s tools.
- You’re always doing jobs for a specific contractor or a specific employer.
- You’re getting paid by the hour.
- You’re being told where you have to work and what hours you have to work.
- You’re being prevented from hiring your own people to help with a job.
Employers love to get away with hiring independent contractors rather than employees. The simple reason for that is that there are stricter legal standards for businesses that hire employees. In addition, classifying employees as independent contractors allows businesses to avoid certain tax rules, such as payroll taxes.
Employers in North Carolina are particularly known for mislabeling their workers. It can also sometimes be an issue between part-time workers, full-time workers and salaried workers.
How Do I Start The Process Of Filing A Workers’ Compensation Claim In North Carolina As An Independent Contractor?
The first step is to figure out whether you’re really an employee under the law. If you are legally an independent contractor, you are not going to be entitled to workers’ compensation.
Many people are asked by their employers to sign documents admitting and agreeing to being independent contractors. If you did this, you may feel like you’re stuck because you signed something saying you’re an independent contractor. This isn’t necessarily true.
The test has to do with control, not whether you signed a document saying that you’re an independent contractor. It still always comes down to whether your employer misclassified you as an independent contractor when, in fact, you’re an employee.
Once it’s determined that the Workers’ Comp Act is available to you, you are free to apply for workers’ compensation benefits. The process starts by filing what’s called a “North Carolina Industrial Commission Form 18.” This document is filed with the North Carolina Industrial Commission.
The form itself explains how to submit it, either by email or mail. The claims process always starts with the injured worker notifying the Industrial Commission of their injury. The burden is then on the employer to determine whether to accept or deny the claim.
What Are Some Common Mistakes You Can Avoid To Prevent Being Wrongfully Classified As An Independent Contractor By Your Employer?
If you’re an employee and not an independent contractor, the biggest thing to avoid is acquiescing to your employer’s contention that you’re an independent contractor. While there may be short-term benefits to this, the long-term effects are always detrimental.
In the event of an injury, you will be left on your own if you’re an employee masquerading as an independent contractor. Your employer, on the other hand, gets the benefits of your work and can carry on without you.
Sometimes, workers like being classified as independent contractors because taxes aren’t being taken out, and it feels like a bump in your pay. You get your full pay because you’re ultimately responsible for filing your own tax return.
Some employers will ask you to accept classification as an independent contractor. You can sign something saying that you’re an independent contractor and get paid on a 1099 rather than a W-2. To avoid issues in the future, don’t go down that road in the first place. Instead, ask to be paid on a W-2 through payroll with taxes taken out.
But none of that actually matters in determining your status as an independent contractor. What matters is things like:
- Does the employer control you?
- Are you using your boss’s tools?
- Is your boss setting your schedule?
- Is your boss telling you when and where to work?
What Legal Recourse Do I Have If I Find That My Employer Made Me Out To Be An Independent Contractor When I’m Actually Supposed To Be An Employee?
After an injury at work, circumstances may arise where you believe you’re an employee, but your employer says that you are an independent contractor. If this occurs, the best recourse is generally to seek help from the U.S. Department of Labor and the North Carolina Industrial Commission.
The U.S. Department of Labor resolves disputes involving the correct classification of workers. In North Carolina, an agency called the Industrial Commission works with the Department of Labor to protect workers from misclassification.
The Industrial Commission has jurisdiction over employees and not independent contractors. When a dispute arises over a worker’s classification in North Carolina, the Industrial Commission must make a legal ruling about whether you are an employee or an independent contractor. This decision must be made before the IRS or any other governmental agency can get involved.
There is no clear-cut test to determine whether you are an employee or an independent contractor. Instead, several factors are weighed by the court. Each factor tends to shed light on the level of control the employer has.
The more control that your employer has, the more likely there’s going to be a finding that you’re an employee. The more control you have over your own schedule, tools and work, the greater likelihood that you’re going to be considered an independent contractor.
How Can An Attorney Assist Me If I’m Seeking Compensation Following An Injury, But My Employer Claims I Am Not An Employee?
Our firm has helped many clients who thought that they had forfeited their rights to workers’ compensation because they signed documents stating they were independent contractors. Based on the nature of the jobs involved, we were able to make legal arguments that our clients were employees. The paperwork they signed was irrelevant.
For example, this issue is very common with roofers. Our firm has represented several roofers who suffered severe injuries after falling at work. Although their employers claimed they were independent contractors, we helped them file a Form 18 requesting workers’ compensation.
When large roofing companies do work in multiple cities or states, they often try to have their separate crews headed by an independent contractor. Employees who work under an independent contractor are employees of the independent contractor, not the main company.
The larger issue is whether the independent contractor is really an independent contractor. The fact that the head worker signed documents agreeing to be an independent contractor does not necessarily make it true. There are often factors that suggest that the independent contractor is legally an employee, such as:
- When the crew leader doesn’t have the ability to negotiate price.
- When the crew leader doesn’t have the ability to decide which jobs to accept or decline because the main company is deciding.
- When the workers all wear uniforms with the main company’s name on them.
- When the workers have business cards with the main company’s name on them.
- When the workers are prohibited from working for anyone else.
For more information on Navigating Workers’ Compensation As An Independent Contractor, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (833) 444-4127 today.