Employee or independent contractor? It matters for workers’ comp

People who work as independent contractors (as opposed to employees) are not eligible for workers’ compensation benefits under California law. However, it’s not always clear which of those categories a worker fits into – particularly in industries like construction.

One case dating back to Jan. 2019 took years to resolve. It involved a man who was hired to work on a home remodel. He worked on a variety of tasks from tile installation and roof sheathing to plumbing. The worker suffered injuries to his spine, head and knee in a scaffolding collapse.

He was denied workers’ comp benefits by the person who hired him and that person’s insurer on the grounds that he was working as an independent contractor on the project rather than as an employee.

Injured worker detailed close supervision

However, in appealing the denial of benefits, the injured worker said that the way he was supervised didn’t meet the criteria that would make him an independent contractor under the law. For example, his employer:

• Directed his work (such as specifying where and how things should be done)
• Was present nearly all the time
• Tracked his breaks
• Paid him daily in cash

There was even an employee ledger for him that listed how many hours he worked and how much he was paid.

The defendant in the case denied that he supervised or provided instruction to the worker, but only reviewed the work after it was finished. He asked for a reconsideration of the case after a workers’ compensation administrative law judge ruled in the worker’s favor.

The final ruling

The reconsideration was heard by a panel of the state’s Workers’ Compensation Appeals Board. The panel upheld the judge’s decision, finding that what the injured man said about his relationship with his employer was accurate. It also noted that the worker didn’t meet the requirements under the law to be considered an independent contractor.

With people working in so many different ways these days, the line between employee and independent contractor can become blurred. It may not matter to someone what they’re considered until something like an injury occurs and they risk losing out on compensation by being misclassified. When this happens, it’s crucial to know your rights and the law.