Employee? Independent Contractor? | Know the Difference

There is a difference between being an independent contractor and an employee. Of course there are more obvious differences such as whether there are any deductions taken out from a check and who negotiates contracts, but these different classifications could also significantly affect your rights if you are injured on the job. On occasion, employers attempt to classify their employees as independent contractors because they want to avoid paying workers’ compensation insurance, taxes, and being responsible under other labor laws.

In Arizona, employers are not required to provide workers’ compensation insurance for independent contractors. That said, just because an employer tells you that you are classified as an independent contractor does not necessarily mean you are an independent contractor under Arizona workers’ compensation laws. Even if your employment contract states that you that you are classified as an independent contractor, you may still be entitled to workers’ compensation benefits in Arizona. A lot of the time, workers do not know or understand the difference between being an independent contractor or an employee. Frankly, the employers often do not know either. There is no bright line rule or one test that is used to make that determination.

In Arizona, courts will look at the situation as a whole to determine whether a worker is classified as an independent contractor or an employee under the workers’ compensation act. Courts normally consider the employer’s right to control the worker. The language of the employment contract is not the only consideration either; courts consider the facts of the individual situation. Keep in mind that courts make the determination on a case-by-case basis.

Having the status of an employee, and not of an independent contractor, is important because if you are an employee, the employer is required to have workers’ compensation insurance, which would provide you with workers’ compensation benefits. This means that if you get hurt on the job, the employer may be held responsible for the economic losses associated with your injury. An employee can recover against the employer under workers’ compensation, and usually does not have any other form of relief.

If you are considered an independent contractor, you still may be entitled to some form of relief from the employer. Independent contractors may not be entitled to workers’ compensation benefits, but are able to bring a civil action against the employer. Although the employer is not required to provide workers’ compensation insurance for independent contractors, workers can cover themselves on a

Briana E. Chua, Esq.

workers’ compensation policy. Generally, self-coverage is a good alternative for independent contractors. If you are in a situation where you have to choose between being classified as an employee or an independent contractor, consider the cost of workers’ compensation coverage before deciding.

If you were hurt on the job, you may have questions regarding the classification of your employment and what steps you need to take. The experienced and knowledgeable attorney’s at Taylor and Associates, PLLC are ready to answer your questions. Contact us at info@injuredworker.com or by phone at 1-800-358-CATS (2287).

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