Written by attorney James Mitchell Hoffmann

Do Independent Contractors Need Workers’ Compensation Insurance?

States have implemented workers’ compensation systems in order to offer protections to both employers and employees. Workers who are injured on the job will be entitled to medical care and workers’ comp benefits, regardless of whose fault the injury is. And employers are protected against workers filing personal injury lawsuits against them or seeking more compensation at a later date. Independent contractors are self-employed, so these same workers’ compensation laws will not apply in exactly the same way. Being self-employed offers many perks. There is more freedom than most salaried employees enjoy. Independent contractors are able to have much greater flexibility with scheduling, working when and where they want. However, working as an independent contractor can have a few downsides as well. If a salaried employee is injured on the job, that employee would be entitled to workers’ compensation benefits, as states require all employers to have workers’ compensation insurance. Employers are not required to maintain insurance for independent contractors, though, so independent contractors must make their own workers’ comp arrangements. Independent contractors and freelancers have several concerns that salaried employees do not need to worry about. Independent contractors must make arrangements for the following:

  • Workers’ compensation insurance

  • Self-employment taxes

  • Lack of protections under labor laws and unions

When you are hired by a business as an independent contractor to do work, you will need to make sure that you are classified as such, and not as an employee of the company. Through their employers, workers who are injured are entitled to medical coverage, disability benefits, and compensation for other injury related expenses. But most states do not require businesses to cover independent contractors. But employers still do not want to be held liable for injuries, so they usually require independent contractors to obtain their own coverage. An independent contractor who does not have any workers’ compensation coverage may be seen as a liability to an employer, who may choose not to work with that contractor. For example, in the construction industry a general contractor who hires a subcontractor is required to show proof to his or her own insurance that the subcontractor is insured, or else the general contractor will be charged a premium for the subcontractor. Even though under Missouri law the subcontractor who identifies as a sole proprietor may not be required to maintain workers’ compensation coverage, general contractors may choose not to work with this individual for that reason. Independent contractors will need to be familiar with the workers’ compensation laws in the state that they are looking for employment. Workers’ compensation laws vary from state to state and can be very complicated. Independent contractors should contact the state labor department or a workers’ comp attorney if they have any questions about what is expected of them and how to operate their business. Additionally, salaried employees will usually be afforded other protections that independent contractors are exempt from. These protections include limits on overtime, protections against wrongful termination, and require that workers are paid minimum wage. Individuals who are self-employed are not afforded these protections.

St. Louis Workers' Compensation Lawyer If you have questions about a workers’ compensation case in the State of Missouri, or if you believe you have been misclassified by an employer, contact a Missouri workers’ compensation attorney.

Additional resources provided by the author

The Law Office of James M. Hoffmann has a strong history of helping injured workers get the medical attention and financial compensation that they need. Contact our St. Louis, Missouri workers compensation law firm to ensure that your rights are protected. Please call (314) 361-4300 or toll free at (888) 872-6795.

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