Businesses Try to Avoid Workers’ Compensation by Calling Employees Contractors

Unfortunately, a lot of small businesses, construction companies, and other types of employers, are looking to try to avoid legal requirements in efforts to cut costs. Those costs often come at the risk of worker safety. One way that businesses will often try to cut costs is by misclassifying employees in a way that the companies don’t have to provide their employees workers’ compensation insurance.

Who Get Workers’ Compensation

As a general rule and with some exceptions, all full time employees are required to be provided workers’ compensation insurance. However, many businesses try to evade this rule by classifying employees as independent contractors, who, as a general rule, do not need to be provided workers’ compensation insurance.

You may find yourself in a situation where you are injured at work, and then have your benefits denied, because your employer, who long called you an employee, now tries to pretend that you are an independent contractor. Thankfully, the law won’t let companies make their own determinations as to who is a worker/employee, and who is an independent contractor. 

IRS Rules and Guidelines

Louisiana, like most states, must follow the laws and guidelines set forth by the IRS in determining who is a contractor and who is an employee. While every case is different, and the facts of each case will not be the same, the IRS guidelines give pretty good advice as to whether a worker is an employee or not.

Employers generally do not have a lot of control over independent contractors. Contractors often do not have set hours, and although they may have a desk or workspace at their employers’ office, contractors will not always be required to be there.

Exclusivity is a big factor as well. Independent contractors generally have the right to work for multiple employers at the same time. There is no “exclusivity,” and no restriction on doing work even for their employers’ competitors.

If the job requires special tools or equipment, independent contractors will usually provide their own at a jobsite. Additionally, independent contractors usually bear the financial burden of their own training (or otherwise are not compensated for time spent training), and in fact, most independent contractors are already trained to do the job they are hired to do. If an employer has to teach someone to do the job, it is more likely the worker is an employee, and not a contractor.

Contractors also tend to bear the risk of financial loss, should a job turn out to be financially unprofitable.

Salary and Payments 

The schedule of payments and how workers are paid are also very telling. Employees are paid regularly, on a periodic basis (weekly, bi-weekly monthly, etc). Contractors are paid sporadically—often, as each job is completed. Additionally, an employee will be paid for his or her time—not conditioned on the outcome of a job, whereas a contractor is often only paid if a job is completed, or completed correctly.

Don’t let your employer try to avoid its requirement to pay workers’ compensation insurance to you. Our New Orleans workers’ compensation attorneys at Lunsford Baskin & Priebe PLLC can help you get the treatment and the benefits that you need. Contact us today to discuss your possible workers’ compensation case.

Resource:

irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined

https://www.lunsfordbaskin.com/can-you-choose-your-own-doctor-if-you-are-injured-at-work/