Many Arizonans work as independent contractors. They face the same risks of work injuries and occupational illnesses as traditional employees face, but Arizona workers’ compensation laws treat independent contractors differently for work-related injuries.
Full or part-time employees who suffer a workplace injury or become sick on the job are entitled to benefits under Arizona’s workers’ compensation system. Employees can receive workers’ compensation benefits, including compensation for medical care, partial lost wages, rehabilitation services, and even death benefits.
The same cannot be said, however, for independent contractors.
Under Arizona workers’ comp insurance laws, employers are not required to purchase workers’ compensation coverage for independent contractors.
There are cases, however, in which employers misclassify employees as independent contractors to avoid paying workers’ comp insurance costs. If you believe that has happened to you, then contact an experienced workers’ compensation lawyer at Matt Fendon Law Group.
Call us at (800) 229-3880 or use our contact form.
Who Is an Independent Contractor?
Independent contractors can be self-employed individuals, like sole proprietors, or people who have their own businesses.
Examples of contracting businesses include roofers, landscapers, housekeepers, truck drivers, rideshare drivers, and providers of physical labor or other services.
What is the Difference Between Employees and Independent Contractors?
Employees and independent contractors have many key differences, including:
- Employees must have income taxes, Social Security, and Medicare contributions withheld from their pay. Independent contractors do not have money withheld from their pay, and are responsible for their own tax obligations.
- Employees are entitled to protection under labor laws like Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Fair Labor Standards Act. Independent contractors do not qualify for the protection of such laws.
- Employees primarily receive their income from a single employer. Independent contractors may work with several clients and advertise to provide services to different clients or customers.
Whether a worker is an employee or an independent contractor in Arizona depends on the state’s “right to control” test.
With an independent contractor, an employer only has the right to dictate the results of the work. But with an employee, an employer can also control how the employee achieves those results.
Factors that are considered under the right-to-control test include:
- The duration of employment: Permanent, indefinite employment indicates employee status, while working on a project or fixed-term basis may indicate independent contractor status.
- The method of payment: Workers paid by regular hourly wages or salaries should be classified as employees. Employees who invoice on a billable hour or project basis might qualify as independent contractors.
- Who provides the equipment and materials for the job: Independent contractors are expected to use their own tools and equipment, while employees may expect to have those furnished to them by an employer.
- The right to hire, fire, or discipline: An employer may hire, fire, and discipline employees. With an independent contractor, an employer may only terminate the contract according to its terms.
- The right to exercise control over details of the work: Employers may direct employees in specific details of how they perform their work, including when and where they must work. Independent contractors have more latitude in completing their work, as an employer only has an interest in the result.
- Whether the work is performed in the usual course of the employer’s business: Workers who perform the core services of the employer should be classified as employees. By contrast, employees who provide more ancillary work may be classified as independent contractors.
Do Independent Contractors Have the Right to Workers’ Compensation Benefits in Arizona?
Sometimes, it can be hard for employees to know if they qualify for workers’ compensation. Here’s an example:
Sarah is an employee of Company A, but Company A is an independent contractor for Company B. Sarah slips and falls while working on a job for Company B. Sarah cannot file for workers’ compensation benefits through Company B because she is not an employee of Company B, but she may be entitled to workers’ compensation from Company A.
Another problem is that the independent contractor status is frequently abused. Employers who purposely misclassify employees as independent contractors as a cost-cutting measure can be held accountable with the help of a seasoned workers’ compensation attorney.
When Do Independent Contractors Need Workers’ Comp?
Although sole proprietors and individuals working as independent contractors are generally not required to have a workers’ compensation insurance policy, there are circumstances where an independent contractor may want to consider purchasing a workers’ compensation insurance policy.
- Meeting the terms of a contract: Some businesses may require independent contractors to carry their own workers’ compensation insurance to ensure that the independent contractor (or anyone working under the independent contractor) does not make a claim against them.
- Providing financial resources for medical bills and lost wages: Many health insurance policies refuse coverage for injuries suffered in the course and scope of work. Workers’ comp insurance can also provide partial wage replacement when an independent contractor suffers a work injury or occupational illness.
Hiring employees or subcontractors: An independent contractor who hires people to work on client projects may be required by Arizona law to purchase workers’ compensation insurance if someone is hurt while working for the contractor.
What to Do If You’ve Been Hurt as an Independent Contractor
If you have been injured while working as an independent contractor, you can take steps to preserve your rights to seek compensation for your recovery:
- Seek immediate medical attention. Make sure to inform the doctor that you were injured while working.
- Notify the employer of your injury. Until you’ve determined whether you are correctly classified as an independent contractor, you should abide by Arizona’s notification requirements to protect your right to potential workers’ comp benefits. Tell the employer about your injury in writing as soon as possible.
- Document the scene of your injury. Take photos of what harmed you and any visible injuries you may have suffered.
- Get witness statements. Collect contact information from anyone who may have seen the job accident.
- Keep copies of your medical records, any bills, invoices, or receipts you receive for medical expenses during your recovery, as well as your income statements. Workers’ compensation in Arizona covers medical costs, partial wage replacement, and disability benefits to qualifying workers. This information will be critical if you need to file a claim.
- Talk to an Arizona workers’ compensation attorney. Being an independent contractor may limit your access to workers’ comp benefits, but it’s wise to check your employment status first.
How Our Workers’ Compensation Attorneys in Arizona Can Help
If you were injured while working as an independent contractor, a workers’ comp attorney from Matt Fendon Law Group can help you:
- We will review the facts and circumstances of your employment to determine whether you have been properly classified as an independent contractor under Arizona workers’ compensation laws.
- We will walk you through your options for seeking financial compensation based on your employment status and the underlying circumstances of your work injury.
- We will file a workers’ compensation claim on your behalf if appropriate.
- We will aggressively pursue the maximum workers’ compensation benefits you are entitled to.
- We will determine if you have any third-party negligence claims and connect you with qualified personal injury lawyers near you.
Don’t assume that your status as an independent contractor is accurate if you’ve been hurt on the job in Arizona. Call Matt Fendon Law Group at (800) 229-3880 or use our contact form to schedule a free consultation with an experienced Arizona workers’ compensation attorney today.
