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Should Contract Workers Get Workers’ Compensation?

Workers’ comp is a type of insurance that just about every business with employees in all 50 states has to carry. The insurance covers lost income and medical bills when an employee gets injured on the job, and it’s a no-fault type of insurance. That means it doesn’t matter if the person at fault is the employer, the employee, a third party, or just bad luck: workers’ comp will pay out the same no matter what.

What Makes Contractors Different

There are exceptions to the blanket coverage that workers’ compensation provides. The biggest one is contract workers, who don’t get any insurance coverage at all. One big reason is because of how contracting works: an employer can bring contract workers in for a single specialized job, let them do their thing, and then leave as soon as the job is done. You could also bring contractors in to replace a regular employee who’s out sick or on maternity leave, plus individuals can hire contractors to redesign their house.

Contract work lets companies bring workers in without worrying about employee paperwork, and the jobs usually pay better because the companies don’t have to withhold taxes or pay for benefits. But what about workers’ compensation?

What Workers’ Compensation Is For

Before workers’ comp insurance, employees who wanted to be compensated for a workplace injury had to jump through several legal hoops, and the odds were usually stacked in the employer’s favor. Workers’ comp was a part of the workers’ rights movement, and it let workers get treatment and some income while they recovered without having to worry about whose fault it really was. The insurance also saved many companies money they would have spent on lawyers and lawsuits.

However, some companies are trying to save even more money these days by classifying their employees as contractors. This doesn’t work, though, because workers’ compensation has its own definition of “contractor” that has nothing to do with the 1099 tax form.

Under Florida law, construction workers can’t be independent contractors no matter what, and subcontractors have to cover their employees, too. In other industries, contractors have to meet four of six requirements like “the contractor can work for any other business at the same time without needing an interview” or “the contractor is working for a specific job and no longer.”

So Why Insure Contractors?

Assuming the contractors who work for you meet the legal standard, you don’t have to pay higher premiums for as long as they work for you. So why bother insuring them? There are a few good reasons:

• Better safe than sorry. A contract worker might be an edge case where it’s hard to tell if they’re an employee, and the person in question gets the deciding vote.
• Contractors who get injured in the workplace can sue the company in charge for negligence and damages. Employees usually can’t because they’re getting workers’ comp payments instead. Extending the insurance to contract workers helps prevent lawsuits.
• Extending emergency care coverage to your contract workers is a nice gesture that they will appreciate.

So regardless of what the laws say or should say, businesses have several good reasons why they should extend the same workers’ compensation protections to their contract employees as they offer to their regular employees. It may be an extra number on your monthly expense list, but it can really come in handy if something bad happens. Of course, that’s how all insurance works.

However, if you happen to be a contract worker who became injured while on the job, and if your employer has no special workers’ comp coverage for you, you may want to bring in a lawyer to figure out your next step. If your injury was thanks to someone else’s negligence, you may be entitled to compensation. Contact a personal injury lawyer near you that can handle workplace injuries and you may just get the compensation you deserve.