Due to the recent economic downturn that North Carolina has suffered, many companies are embracing hiring independent contractors to fulfill their employment needs. This strategy allows companies the freedom to hire specialized workers while avoiding having to pay the employment taxes and insurance required for a typical employee, thus saving the company money.

But what happens if an independent contractor gets hurt while working for the employer? Are they entitled to the same Worker’s Compensation benefits that a normal employee does? Generally, the answer to this question is no. In North Carolina, an independent contractor is not entitled to Worker’s Compensation benefits because they are not considered an active employee of the company that hired them. As such, the company does not have to pay employment taxes or for Worker’s Compensation insurance for the employee.

What is An Independent Contractor?

To understand the answer to the previous question, we must first look to see what the definition of an independent contractor is. An independent contractor is an individual who enjoys independent employment, has contracted with the employer to do a certain project, and is allowed to accomplish the project according to their own judgment and methods. Since the individual is an independent contractor, they are not specifically supervised by the employer, except as to the quality of the work.

Challenging the Independent Contract Designation

Although a company may have specifically stated that an individual is to be classified as an independent contractor, this does not explicitly mean that they are an independent contractor in the eyes of the law. Since there is a significant monetary incentive for companies to classify individuals as independent contractors, the legal system has devised a test to determine whether an individual is in fact a normal employee or an independent contractor. In North Carolina, the Industrial Commission will determine whether an individual should be classified as a normal employee by looking for the existence of some of the following factors (this is not an exhaustive list):

  • Whether the individual is performing the functions of an employee;
  • Whether the individual is taking guidance and direction from the employer;
  • Whether the individual has their hours set by the employer;
  • Whether the individual works for no other employer; or
  • Whether the individual is basically acting as an employee;

Since this test requires a close look at the relationship between the individual and the employer, it is evaluated on a case-by-case basis. If enough of these factors are present, the individual contract can be considered an employee and thus, required to be provided with Worker’s Compensation benefits.

Contact Us

If you or someone you know has been injured while at working as an independent contractor, you should Contact Us for a free consultation on your case. Since the designation of independent contractor is vital to a successful Worker’s Compensation case, it is important you hire an experienced Worker’s Compensation attorney who can fight for your rights. By contacting an experienced Worker’s Compensation attorney, you will receive valuable legal advice and an experienced guide through the complex Worker’s Compensation process.

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