How Do 1099 Employees Fit into Workers’ Compensation?

The short answer – it depends. True independent contractors won’t be eligible to seek benefits, but there are  exceptions that you may qualify for. If you’re injured on the job and are wondering whether you’re eligible, it’s best to speak with a workers’ compensation lawyer for a personalized opinion of your next steps.

1099 employees are generally considered independent contractors, but  may still be covered under the workers’ compensation statute, depending on the circumstances.  Some employers intentionally mis-classify employees as independent contractors to save on workers’ compensation and other expenses.  In most circumstances, the difference between an independent contractor and an employee depends on the amount of control exercised by the employer.  Although there is no one factor that makes one an independent contractor, the concept of independence is usually demonstrated by a person who supplies their own tools and materials, has a separate business, and has more than one client.  Within the construction industry in Florida, an independent contractor (even if truly independent) is generally covered under workers’ compensation .  In other industries, it will depend whether the individual claimed as an independent contractor is truly independent.  The legal tests are multiple, and if there is any question on the matter, legal assistance is probably needed.

What Defines an Eligible Employee?

An “employee” has a different meaning depending on your perspective. For insurance purposes, what defines an employee is the level of control the employer has over that working relationship.

Specific definitions will differ by state, but some of the common questions asked to 1099 employees seeking workers’ compensation include:

• Does the employer make their schedule?
• Is the equipment owned or controlled by the employer?
• Does the employer control how the contractor works?
• Is the contractor covered under an independent insurance policy?
• Does the contractor work solely with the employer and no other clients?

If it’s found that the 1099 employee would be considered a traditional employee, that worker may be eligible for workers’ compensation insurance. Some employers may attempt to deceive you into believing you’re completely ineligible because you don’t have a W-2, but that might not be the case. It’s best to consult with a knowledgeable attorney to confirm this and better understand the situation, especially if your employer complicates the process.

The Withholding on Your Paycheck Isn’t the Only Factor in Your Workers’ Compensation Eligibility

It’s not uncommon for employers to set up unique employment structures to diminish their tax liabilities. However, just because they don’t claim you as an employee,  doesn’t mean you aren’t considered this under workers’ compensation standards. There’s a chance you might qualify, and the best way to find out is to speak with an expert on the topic and gauge their opinion.

Our team leverages decades of experience to support our clients through complicated workers’ compensation challenges. Complete a free, no-risk case evaluation to get started with us for no upfront costs.