Who is Eligible for Workers’ Compensation Benefits?
In order to qualify for workers’ compensation benefits, you must be an “employee,” with two limited exceptions. Crewmembers on vessels and interstate railroad workers are ineligible for workers’ compensation benefits. If those types of employees get injured on the job, federal law requires them to sue their employers instead of receiving workers’ compensation benefits. For most other workers, their eligibility for workers’ compensation benefits is based on whether they are employees or independent contractors.
The Difference Between An Employee and an Independent Contractor
An employee is someone who works for another person or company, and who is not an independent contractor. So what is the difference? There are a number of factors to consider in determining the difference, but, in general, an employee is a worker who:
- works under the direction and control of the employer
- performs the regular business of the employer
- uses the employer’s tools
- has a long term position with the employer, and
- has taxes taken out of his/her pay by the employer.
An independent contractor is the opposite. He/she uses his/her own tools, does not have taxes taken out by the employer, may be hired for only one job, is not necessarily performing the employer’s regular business, and is often highly skilled.
An important distinction between the two is who controls the details of the work. An employer has the authority to tell an employee exactly to perform every step of the job. In contrast, the employer does not have the power to tell an independent contractor how to perform the job. A good example is a plumber or an electrician. When you hire a plumber or an electrician, you tell them what you want them to do (i.e., fix a leak or your wiring), but you do not tell them how to fix the leak or the wiring.
Read the full story at Eligibility for Workers’ Compensation After a Job-Related Accident