When you are hurt on the job, you may be shocked at how difficult it can be to receive the workers’ compensation benefits you need and deserve and how many disputes your employer raises to your claim. You may find yourself arguing about some basic issues, such as whether you are an independent contractor or an employee. Even if you always thought you were an employee, you may suddenly discover your employer thinks of you as an independent contractor and are therefore ineligible for workers’ compensation benefits. However, you cannot take your employer’s word for your status—at least for workers’ compensation benefits purposes.
Why It Matters Whether You Are an Independent Contractor or Employee
Your status as an employee or an independent contractor will determine whether or not you are entitled to workers’ compensation benefits under New Jersey law. If you are considered an independent contractor, your employer is not required to pay unemployment, social security, or disability taxes for you or provide you with workers’ compensation benefits. This is one reason some employers hire independent contractors.
However, some employers are misclassifying workers as independent contractors. This is a serious violation of both state and federal laws, and the employer could be subject to criminal, legal, and financial penalties. If your employer claims you are an independent contractor, this may not be true—even if you signed an employment contract. You may be an employee entitled to workers’ compensation benefits for your injuries.
What Are the Factors That Determine Whether You Are an Independent Contractor?
The New Jersey Department of Labor and Workforce Development has adopted the strict statutory “ABC” test to determine if a worker is an independent contractor. Under this test, all of the following must be established in order for the employee to be considered an independent contractor:
- The employee is free from direction and control both under his contract and in fact.
- The employee provides a service outside of the usual course of the employer’s business or place of business.
- The employee is customarily engaged in an independently established trade, occupation, business, or profession.
New Jersey’s workers compensation laws are remedial in nature and employee status is construed liberally—meaning you could be considered an employee even if you would not be under traditional common law standards. The New Jersey Department of Labor and Workforce Development uses a Worker Classification Questionnaire that it encourages employers to also use to determine if an employee is really an independent contractor.
The “A” prong of the test is based on law developed through case law, meaning through the decisions of judges. It focuses on whether the business controls the means and methods that the employee uses to achieve the duties he was contracted to perform. When an employer does the following, he is in fact in control of the employee:
- Sets the starting and ending times of the job
- Requires the filling out of forms and evaluations by the employee
- Requires mandatory attendance at meetings
- Subjects the employee to warnings and other forms of discipline that limit the employee’s independence
Courts may look at other factors in determining if the prong “A” requirements are met. These include the level of training of the employee, how much he is supervised, his level of compensation, the other benefits he is offered, the manner by which he can be terminated, and the employer’s and employee’s understanding of the relationship.
As to prong “C” of the test, courts have determined that a number of factors should be considered. They include these criteria:
- The duration and strength of the worker’s business
- The number of customers the worker has and the volume of work each customer generates for the worker
- How many tools, pieces of equipment, or vehicles the worker owns as part of his business
- The amount of compensation the worker receives from this employer in relation to other clients he works for
Is your employer claiming that you are an independent contractor after you were injured at work? You need the help of an experienced workers’ compensation attorney if your employer is misclassifying you. Call our office today to schedule a free consultation to learn about your legal options under New Jersey’s workers’ compensation laws.