Workers’ Compensation for Employees vs. Independent Contractors

Don Kamb
Workers' Compensation

Central to your right to workers’ compensation from a company while working in South Carolina is the classification of your working relationship. Specifically, whether you are an employee vs. independent contractor.

The classification is what determines whose obligation it is to maintain workers’ compensation insurance coverage and if you could have a claim against the employer for injuries that happen on the job. We explain the key differences below and provide some guidance for workers’ comp in South Carolina as an independent contractor.

The Difference Between Employees vs. Independent Contractors

In today’s gig economy, the difference between employees and independent contractors has become difficult to identify. Traditionally, you might think of employees as those who work exclusively for one company with set hours, pay, and benefits. Independent contractors, by comparison, may provide similar services to more than one company and have more flexibility in when and how they work. 

How to Tell If You’re an Independent Contractor vs. Employee 

The South Carolina Workers’ Compensation Commission identifies four factors to determine if you are an employee or independent contractor. The working relationship to these factors determines your employment status. Those factors include the following:

  • The right or exercise of control: Does the employer or worker control the method of work? 
  • The furnishing of equipment: Does the employer provide the necessary tools or training to perform the job duties? 
  • The method of payment: Is the worker paid through the submission of invoices, flat fees, or standard wages regularly (e.g., weekly, or bi-weekly)?
  • The right to fire: Can the employer fire the worker or take other employment-like actions against the worker such as suspending, demoting, or other forms of discipline? 

While other factors may signal the intended employment relationship between a company and worker, they may not have much bearing on the four factors above. For example, terms used in a contract, whether written or oral, and the use of certain tax reporting documents (i.e., a W-2 versus a Misc-1099). 

Is Workers’ Comp the Same for Independent Contractors in South Carolina? 

South Carolina generally requires businesses with four or more employees in the state to maintain adequate workers’ compensation coverage. This includes part-time or seasonal workers and family members who work for the business. However, employers do not necessarily need to obtain workers’ compensation coverage for their independent contractors, and, in some cases, you may have contractual obligations to obtain coverage.    

How Can South Carolina Independent Contractors Get Workers’ Compensation Coverage? 

You can purchase workers’ comp insurance from a commercial provider that has a license to underwrite in South Carolina. Alternatively, you might be able to obtain coverage through South Carolina’s assigned risk program through the National Council on Compensation Insurance. Workers’ comp coverage can protect you in case of accidental injuries, both temporary and permanent, that occur in the course of employment, such as:

  • Broken bones
  • Burns
  • Ligament or muscle tears
  • Lacerations
  • Head trauma
  • Damage to your nervous system
  • Loss of use

If covered under workers’ compensation, you may be eligible for compensation to reimburse medical care, lost future wages, or lost earning potential. 

In some cases, it is also possible to get workers’ compensation coverage through the general – or higher tier – contractor.  This should be discussed at the time of contracting.

Workers’ Comp Claims against Employers as an Independent Contractor

Even if you believe you are an independent contractor, you may still have legal rights to workers’ comp claims against a business when injured on the job. First, the business could have initially misclassified you as an independent contractor when you were an employee from the start because of the factors listed above. Alternatively, your work relationship could change over time and transition you from contractor to employee. Consider the specific events and facts leading up to the injury and how they might impact your right to workers’ compensation. For example:

  • Changes in job responsibilities
  • Pressure to use unsafe tools or methods to accomplish tasks
  • Negligent, reckless, or intentional conduct of the company or its employees that led to your injury

Meet with a South Carolina Workers’ Comp Attorney Today

Don’t let a company’s classification of you as an independent contractor deter you from seeking counsel about your workers’ compensation rights following an injury. Consider a free consultation with William & Kamb to determine the status of your working relationship and the available rights to compensation under workers’ comp or other legal protection.