Are New Jersey Independent Contractors Covered by Workers’ Compensation?

Workers’ Comp Helps Injured Workers, But Are All Workers Covered?

Full-time employees who suffer work-related injuries or illnesses can receive workers’ compensation benefits from their employers, including compensation for medical expenses and partial reimbursement of lost wages. But do those benefits extend to workers classified as independent contractors?  With increasing numbers of people working as “freelancers” or in the “gig” economy, many wonder what to do after sustaining injuries on the job.

While freelancers typically do not qualify for workers’ compensation, that doesn’t mean they are out of options. Our firm can help you figure out whether the law would truly consider you to be an independent contractor.

Our New Jersey workers’ compensation attorneys have over 40 years of experience helping the injured and getting them the results they deserve (over $1 billion to date, many of which include workers’ compensation settlements or judgments).  We have an aggressive team of more than 30 attorneys who can explore your options and help you figure out your best options for moving forward.

Are Independent Contractors Covered by Workers’ Compensation in New Jersey?

Under New Jersey’s workers’ compensation system, only employees may recover workers’ compensation benefits from an employer. The workers’ compensation system typically does not offer benefits to independent contractors because the law classifies contractors differently from employees.

Businesses sometimes misclassify their workers as independent contractors.  Some misclassifications occur due to a good-faith misunderstanding of the law, but some employers choose to intentionally misclassify their workers.  They do this to cut down on costs, such as workers’ compensation insurance premiums, employer health insurance contributions, or payroll taxes.  As a result, a worker whose employer misclassifies them as an independent contractor may have the right to recover workers’ compensation benefits for a job-related injury or illness if they can prove that they truly are an employee, as opposed to an independent contractor.

How To Determine if You’ve Been Misclassified as an Independent Contractor

In New Jersey, the Courts typically use the “ABC” test to determine if a worker is truly an employee.  Although this is a complicated test to apply, in short, a person is not found to be an independent contractor merely because the employer pays a worker by 1099 and does not withhold applicable state and federal taxes.

An employer may classify a worker as an independent contractor only if it can satisfy all three components of the ABC test:

1. The employer does not direct or control how the worker performs their duties, and
2. The worker performs duties outside the employer’s usual course of business or performs work outside the employer’s place(s) of business, and
3. The worker works in an independently established trade, occupation, profession, or business.

Some of the signs indicating that you are an employee rather than an independent contractor under the ABC test include:

• You work exclusively for your employer rather than performing similar work for multiple businesses.
• You do not hold yourself out as being available to perform similar work for other clients.
• You have an indefinite working relationship with your employer rather than a fixed term or a specific project, the conclusion of which would end your working relationship.
• You receive regular paychecks rather than payment for invoices you submit.
• Your employer provides your workspace, tools/equipment, or work clothes.
• Your employer controls your work hours (when not essential to the type of work you do), where you work, and how you complete job tasks.
• You perform the same kinds of work as other workers in your workplace.

If the above applies to you and you’re classified as an independent contractor, your employer might be misclassifying you.

As a misclassified independent contractor, you may have the right to obtain workers’ compensation benefits under New Jersey’s workers’ comp system if you’ve suffered a work-related injury or illness.

What’s Covered Under NJ Workers’ Compensation?

Benefits available from workers’ comp include:

• Medical benefits – Pays for all reasonable and necessary medical treatment for an employment-related injury or illness, including hospitalizations, surgeries, prescriptions, or physical/occupational therapy.  An employer or workers’ compensation insurance carrier can designate a physician to oversee a worker’s treatment, except when an employee requires emergency treatment, or an employer/insurer wrongfully refuses to provide medical benefits.
• Temporary total disability benefits – When a worker cannot work for more than seven days, these benefits partially reimburse the worker for their lost wages.  A worker will receive 70 percent of their average weekly wage, subject to a cap of 75 percent of the Statewide Average Weekly Wage (SAWW) and a floor of 20 percent of the SAWW. Temporary total disability benefits end when a worker returns to work in some capacity or reaches maximum medical improvement.
• Permanent partial disability benefits – A worker who suffers a permanent partial disability due to a job-related injury or illness may receive a financial award based on the type and severity of the disability. Workers will receive their awards in weekly payments.
• Permanent total disability benefits: A worker who cannot return to any work after reaching maximum medical improvement may continue to receive benefits at the temporary total disability rate.  Permanent total disability benefits initially last 450 weeks but can continue if the worker cannot return to the workforce.

Common Types of Workers’ Compensation Injuries

Workers’ compensation can provide benefits for injuries or illnesses that arise in the course and scope of an employee’s job.  Examples of some common injuries or conditions that may give rise to a workers’ compensation claim include:

• Neck and back injuries
• Broken bones
• Ligament, tendon, and muscle tears and/or sprains and strains
• Burns
• Herniated spinal discs
• Nerve damage
• Repetitive stress injuries, such as bursitis or carpal tunnel syndrome
• Degloving injuries
• Internal organ injuries
• Traumatic brain injuries
• Eye damage
• Vision/hearing loss
• Spinal cord injuries
• Amputations
• Traumatic amputation or limb loss
• Infectious diseases acquired on the job, such as COVID-19
• Cancers or other chronic illnesses caused by work-related toxic exposure
• Work-related death

A New Jersey workers’ comp attorney can help you seek the money you deserve for a workplace injury.  Our office provides a free guide written by partner, Steven Cohen, which you can obtain here.

How Can an Attorney Help?

Pursuing workers’ compensation benefits can become complex if your employer has classified you as an independent contractor.  A workers’ compensation attorney can help you fight for the financial resources you need to recover from a work injury by:

• Investigating the circumstances of your employment to obtain evidence proving your employer misclassified you as an independent contractor
• Securing evidence from the work accident to prove your injury or illness is job-related
• Documenting your injuries and expenses to make sure you recover compensation from your workers’ compensation claim
• Preparing and filing your claim with your employer or taking your claim to the New Jersey Division of Workers’ Compensation if your employer refuses to pay you benefits based on their classification of you as an independent contractor
• Advocating on your behalf before the Division of Workers’ Compensation to prove you are an employee and not an independent contractor.

Your attorney can also find out if you have grounds to file a third-party claim. This is when another party played a role in causing the injury, such as a distracted driver or a manufacturer of faulty equipment. We have a track record of success in seeking money from negligent employers and property owners for failing to provide safe working conditions.

Talk to an Experienced Workers’ Compensation Lawyer in New Jersey Today

If you have been hurt while working, you deserve to understand your rights to workers’ compensation benefits. Contact Davis, Saperstein & Salomon, P.C., today for a free consultation to learn more about workers’ compensation for independent contractors from our knowledgeable legal team. We are happy to meet with you in person or virtually via FaceTime or Zoom. If English is not your preferred language, we have Spanish speakers on-site and translation services for many other languages, including Polish, Portuguese, Russian, and more. The consultation is free, and we don’t get paid unless we win money for you.