Misclassified As An Independent Contactor – What You Need To Know?

Classifying workers as independent contractors has become a growing concern in the U.S. Employers take this recourse mostly in an attempt to lower their overall costs and avoid financial responsibilities. Apart from paying workers’ compensation, employers are also required to pay payroll taxes on the wages. In some states employers are also required to contribute to the unemployment insurance program on behalf of their employees as well. Employers oftentimes find it difficult to cope with the costs of maintaining employees.
But taking this recourse, employers can seldom escape their obligations to provide workers’ compensation to the workers, even though they have been designated as independent contractors. But many workers are not aware of this fact. Employers take advantage of this fact and shove off their responsibilities. In fact the Workers Compensation laws of most states require the employers to provide Workers Compensation benefits for the uninsured independent contractor as well.

Take the example of the Chicago truck driver Lucio Barrera, who didn’t think twice before signing a contract with NJ Inter-modal Services in 2013. He had no idea that he was risking his employment. He realized something was wrong when his paychecks showed zero earnings. Finally, he was informed that his services were no more needed by the company, which led to financial hardships. Barrera filed a lawsuit against his employer with the help of a workers’ compensation attorney and said 50 to 100 other drivers suffered similar damages due to DNJ’s practices and policies as well.

Thousands of employees have to face hardships due to this misclassification. An experienced and knowledgeable workers’ compensation lawyer in Chicago or your area can help you. Even though the exact number of workers being classified as independent contractors is unknown, a report by the Economic Policy Institute, published in June 2015 indicates “10 to 20 percent of businesses misclassify at least one worker as an independent contractor.”

Who is an Independent Contractor?

Independent contractors are people who perform compensated work for individuals or businesses, but are not considered as employees. The contractor is required to sign an agreement with the business or individual in order to establish the independent contractor relationship.

Independent contractors in general are not eligible for workers’ compensation coverage by law, but employees misclassified as independent contractors by the employers would be eligible. Employers often deny a worker being an employee to avoid responsibility, especially when they get injured.
If you believe you have been trapped by your employers by being designated as an independent contractor and denied workers’ compensation and other benefits, you can file a workers’ compensation lawsuit against your employer.

Know Your Rights

Workers’ compensation is an insurance program designed to help employees injured at work; and every employee is eligible to get the benefits. However, whether an independent contractor would be eligible depends on many factors.

As mentioned earlier, independent contractors are not legally eligible for workers’ compensation; but that does not mean contractors should automatically assume they will not be able to receive the benefits. If an employee has been misclassified and he is able to prove the circumstances or that his work is such that he should be considered as an employee; he may be able to get the benefits.

For example – A litigation involving delivery drivers working with shipping company FedEX, indicates that a contractor cannot be denied of the benefits just because employer decides to. FedEX claimed that the drivers (thousands of them) working for them will not be eligible to get benefit provided to employees (such as workers’ compensation, overtime, etc.) since they were working as independent contractors and have even signed the contracts.

But the court ruled in favor of the drivers specifying that despite the agreements, the drivers should be classified as employees and not independent contractors taking into consideration the amount of control asserted over the drivers. In fact, employees who have been misclassified have higher chances of winning lawsuits and accessing the employee benefits. Therefore, if you have been trapped, consider proceeding to the court.

There are several other factors that determine whether or not employees classified as independent contractors should be given the benefits:

  • Permanency of relationship
  • Extent of investment in materials and/ or equipment on part of the workers
  • The extent to which the services are an integral part of a business
  • Degree of independence for the contractors

In case you file a workers’ compensation as an independent contractor, the court will look past the contracts and agreements and get into the actual facts of the case to determine whether or not the worker is an employee. But persuading the judges can be difficult. You need strong evidences to prove your commitment duty towards the employer. Therefore, you need to hire an experienced attorney who can analyze your case and provide advice as to how to proceed with the case.


A workers’ compensation attorney would use his knowledge and network to gather the evidences and prove that designating you as an ‘independent contractor’ was indeed a ploy on part of the employer to save himself from the obligations.

However, it is best to stay away from the complications if possible. So read the contracts well before signing and communicate with management about changes in the system. As they say, precaution is better than cure – keep your eyes open!

We at Kosin Law Office, LTD. have handled thousands of workers’ compensation claims and legal cases.

If you have been hurt or injured, let us help you get the justice and compensation you deserve!

There are NO FEES unless we collect BENEFITS for YOU! No Settlement Until YOU Are Satisfied!

We have handled thousands of accident and injury law cases. Contact us today and let our knowledge and experience work for you. We provide personal attention and offer free and confidential consultations.