Contract Worker or Employee? How Your Status Affects Your Workers’ Compensation Claim

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While getting hired is a joyful event, it may become confusing when your new boss says you are an “independent contractor.” Many times, workers are mislabeled by companies – whether on purpose or mistakenly – and an incorrect categorization can adversely affect your rights if you are injured on the job. To prevent any surprises, it is important to understand the difference between what defines an independent contractor and an employee.

If you or someone you know is unsure of your work status, contact an Anderson workers’ compensation lawyer right away to seek help in answering this question.

Contractor v. Employee

When attempting to determine whether an individual is a contract worker or an employee, there are three particular sources that can help to resolve this issue. The status is not always easily determined but guidance can be sought from common law principles, the Fair Labor Standards Act (FLSA) and court  rulings.

Factors to be considered when looking to see if someone is an independent contractor or an employee includes, but is not limited to:

    1. whether or not the employer defines what the job is and how it is being done;
    2. method of compensation (i.e. payroll vs. sporadic pay);
    3. whether the employer or the worker supplies the equipment, materials and tools;
    4. if the worker can choose his or her own schedule;
    5. whether the worker is temporary or permanent;
    6. if the work conducted by the worker is an integral part of the business or not; and
    7. whether or not the employer has a right to fire, or the worker is free to stop.

The more control the employer has, the more the status will be that of an employee. These fundamentals are used to consider if someone is a contract worker or employee have been adopted by the IRS and many states regarding what defines an independent contractor, these guidelines focus on the employer’s level of control over the worker.

In an effort to interpret the provisions of the FLSA to discern between contract worker and employee status, many federal agencies and courts have created an “economic realities test.” This analysis looks at the worker’s dependence upon the business for which he or she works. Should the individual derive a large portion of his or her salary from this business, then the higher the likelihood that the person is an employee. Moreover, the analysis looks at other factors such as skill level, intent of the parties, and payment of social security taxes and benefits.

Beyond the guidelines provided by the FLSA, courts will also ask the following questions in addition to the analysis: each party’s level of loss in the work relationship and the degree of control of the work and which party has this control, among others. When the employer does not have authority to control how and party does the work but simply provides and outline, then the relationship will probably be deemed that of an independent contractor.

South Carolina Workers’ Compensation

It is important to understand that, under South Carolina’s workers’ compensation law, only employees are eligible to claim compensation benefits if injured on the job. In other words, if you are an independent contractor and are injured while working, you will not be eligible to file a claim.

In addition to being an employee, the injury must have occurred within the scope of the victim’s regular employment. Such an injury will be eligible even if the incident occurred off-site. If the injury occurred while an individual was at work, he or she was engaged in an activity that was not related to his or her scope of employment, recovery may not be possible. That being said, if a worker all of the aforementioned is met and the accident was the worker’s fault he or she may still be eligible for benefits.

Legal Help in Anderson

If you or someone you know has been injured on the job in South Carolina, you should be certain of your employment status – whether or not your employer has categorized you appropriately – as this directly affects your rights to compensation. Hire a South Carolina workers’ compensation lawyer who is well respected and knowledgeable in the law to evaluate the particular factors of your case. The experienced Anderson workers’ compensation attorneys at The Law Offices of Steven M Krause PA can explain your legal rights under the law and possibly dispute your employment status. Click here to contact someone today.


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