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Friday F.A.Q.: “Is an Independent Contractor Entitled to Workers’ Compensation Benefits?”

Employees are entitled to workers’ compensation benefits, while independent contractors are not.

An employer would concede a claimants’ employment status when he is clearly an employee, but there are times when an employer would hold out that a claimant is an independent contractor. In these situations, workers’ compensation benefits are denied, and the Court would be tasked with making a determination of whether the claimant is an employee or an independent contractor.

So, how is this done?

The Board has set forth ten (10) factors for determining whether a claimant is an independent contractor, and it expects that all of them are considered by the Court. They are:

  • Who controls the time and manner in which the work is to be completed?
  • Does the claimant have a Federal Employer Identification Number, or did he file a business or self-employed income tax return?
  • Does he maintain a business establishment that is separate from the alleged employer?
  • What kind of work does he perform (is it different from the primary work of the alleged employer), and does he perform work for other businesses?
  • Does he operate under a contract with the alleged employer?
  • Did he obtain a liability insurance policy under his own business name?
  • Does he have recurring business liabilities and obligations?
  • Does he have a business card that advertises his own business, and not that of the alleged employer?
  • Does he provide all of the equipment and materials necessary to perform the job he was hired for? AND
  • Does he work under his own operating permit, contract or authority?

While this seems like a straightforward list of factors, determining whether a claimant is an independent contractor is not always cut and dry. This is seen in cases when there is no contract between the claimant and the alleged employer, and there is a lack of documentary proof that the claimant has his own established business.

When this happens, the Court must delve into the nature of the alleged employer’s control over the claimant and the work performed. Some things the Court looks at in determining control are any glaring evidence of the right or exercise of control, the method of payment, who furnishes the needed equipment and who has the right to terminate the claimant. See Winglovitz v. Agway, Inc., 246 A.D.2d 684, 685 (3d Dept. 1998). If the Court finds that the alleged employer exercised significant control over the claimant, it will likely find that he is an employee, and not an independent contractor, and is entitled to benefits.

Therefore, to prevent potential liability even when the claimant is hired as an independent contractor, employers should ensure that there is a written contract documenting all terms and conditions of the hiring and obtain all pertinent information about the claimant’s business at the time of hiring.

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Tashia Rasul’s Handbook, “Defending Construction Claims in New York,” subtitled “A Practical Protocol for Coordinating Workers’ Compensation and General Liability Defense in Catastrophic Construction Claims,” is intended for employers, risk managers, insurance brokers and adjusters who are involved in the defense of construction accident claims in New York, and who are looking for a plain-English guide to defending these claims.

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Our Construction Defense Team is led by Partner Tashia Rasul, Esq. This dedicated team exclusively handles workers' compensation claims arising out of construction accidents. Tashia’s expertise lies in complex coverage issues, wrap-ups, and claims arising out of catastrophic injuries. As part of her practice, Tashia frequently visits accident sites and provides on-site training to employers regarding workers' compensation claims, as well as to develop defense strategies. Tashia is the author of the “Defending Construction Claims in New York” Handbook, available here.

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