Preventing warehouse injuries requires establishing a strong workplace safety culture, following ergonomic principles, and maintaining good housekeeping practices. If you...
Workers’ Compensation Employee Misclassification
What does employee misclassification as independent contractors have to do with workers’ compensation? An employer avoids the duty and cost of carrying workers’ compensation coverage for independent contractors.
In one case described in a New York Times op-ed, a construction employer forced an employee, who had worked for the company for six years, to switch to independent contractor status. The worker’s duties did not change, but he accepted the change because of the poor economy.
A U.S. Department of Labor study estimated that approximately 30 percent of employers misclassified workers back in 2000. Since then the problem has worsened as employers look for additional cost savings.
The recent Illinois Supreme Court of Bartlow v. Costigan addressed whether the Act was constitutional. The case started with an investigation of whether a roofing contractor had misclassified workers. A preliminary determination found 10 individuals misclassified and proposed a large fine. The owners of the roofing company challenged the constitutionality of the Act. The court rejected the arguments that the law violated "due process rights and is impermissibly vague."
Since the Act went into effect, the DOL has initiated more than 100 investigations and collected fines of more than $300,000.
Workers' Compensation Requirements
To receive benefits through the workers' compensation system an employer-employee relationship must exist. The term "employee" is broadly construed. When there is conflicting evidence on the issue, the commission will make a determination.
No rigid rule exists for determining the employer-employee relationship. The following factors are frequently used in borderline cases:
- Who had the right to control how work was completed?
- How was the worker paid?
- What skills were required to complete the work?
- Who provided the tools, materials and equipment?
In general, an independent contractor/sole proprietor controls when and how work is completed, works off a bid system, brings the necessary tools, and is liable for any profits and losses from a job. When the employer controls the what, how, and when, it is probably an employee relationship.
An experienced workers' compensation lawyer can advise whether your employment relationship may qualify you for workers' compensation benefits. If you have been misclassified as an independent contractor, you might still be able to receive benefits.