How Does Worker's Compensation Work For Freelancers?

According to a recent study from independent research firm Edelman Berland, over 53 million Americans are currently working as freelancers. A good 40 percent of these freelancers are independent contractors – workers who aren't directly employed by the companies they work for.

If you find yourself freelancing on a full-time basis, then you're probably wondering if you're still eligible to receive worker's compensation benefits in the event you happen to be injured while performing your work duties.

The Straight Answer

Unlike wage earners and salaried employees, independent contractors are left out of the loop when it comes to worker's compensation eligibility. Although most state labor laws require employers to cover their salaried and wage-earning employees, freelancers who work with those employers aren't given the same protections or benefits.

Why Independent Contractors are Left Out

Independent contractors, unlike their wage-earning and salaried counterparts, aren't directly employed by the companies they work with. As their namesake implies, independent contractors work with companies based on a variety of short and long-term contracts, where they're paid a flat fee for each piece of work they complete instead of relying on wages or a negotiated salary. At the end of the term, both the contractor and company cleanly part ways with one another.

Since independent contractors aren't an official part of a company's workforce, the companies that hire them for freelance work aren't required to cover them under the same worker's compensation umbrella as their salaried and wage-earning counterparts.

For this reason, most freelancers are forced to rely on their own insurance coverage if they're injured while performing their freelance duties. Fortunately, insurance agencies that normally sell worker's compensation coverage to companies are now offering plans for self-employed individuals.

Notable Exceptions

Exempting independent contractors and other freelance workers from receiving worker's compensation benefits requires those workers to fall under strict guidelines distinguishing independent contractors from employees:

  • If a freelance worker is brought in on a permanent basis, told to use the company's offices and equipment to work or is being supervised by a direct superior employed with the company, that worker is no longer a freelancer, but an employee who qualifies for worker's compensation benefits.
  • If a freelance worker is brought in on a temporary basis, allowed to work from home or another location using his or her own equipment and acts independently of the hiring company's direction, that worker will remain a freelance worker who is not entitled to worker's compensation benefits.

If you're a freelance worker and you're unsure about your ability to qualify for worker's compensation benefits, you may want to seek the advice of an attorney who is experienced in these matters.

To learn more, contact a law firm like Hardee and Hardee LLP