Misclassification of Delaware Workers as Independent Contractors

At Silverman, McDonald & Friedman, our skilled workers’ compensation attorneys represent individuals who have suffered workplace injuries and occupational illnesses in and around Seaford, Wilmington and Newark. Please contact us to learn more.

The misclassification of employees as independent contractors is a huge issue in workplaces throughout the United States. The Economic Policy Institute (EPI) estimates that between 10 and 20% of employers misclassify at least one worker as an independent contractor, and they can be found in all sectors of the economy.

Sometimes the misclassification takes place as an error, or it can happen intentionally when an employer is trying to save money and avoid paying taxes. However, the vital issue of concern here is the fact that workers who are misclassified as contractors miss important protections that employees enjoy, such as workers’ compensation, when they get injured on the job, develop an occupational disease or die in a workplace accident.

There are several objective tests that you can use to figure out if a contractor is really being treated as an employee. It can be tricky because lines often get blurred especially when working with teams comprised of both employees and contractors. One of the test is the Internal Revenue Service Test.

The IRS has determined that the following categories delineate the levels of control and independence between a worker and their employer:

1. Behavioral: Does the company control the worker and how they do their job?
2. Financial: Does the employer control how the worker gets paid, whether expenses are reimbursed, whether tools and supplies are provided?
3. Type of relationship: Are there written contracts or employee-type benefits such as vacation pay, a retirement plan? Is the work a key aspect of the business?

Misclassified workers do not qualify for workers’ compensation when they are injured

If you are and have been working in the capacity of an employee, but classified as an independent contractor, and you are injured in a workplace accident, you will not qualify to receive workers’ compensation benefits. An employee who suffers the same injury on the job would qualify for a partial wage-replacement temporary disability benefit, and medical expenses related to the workplace injury. If the worker is unable to recover from the injury enough to be able to do their old job, workers’ compensation also provides rehabilitation and job training so that the injured worker can gain new skills to find employment in another part of their industry or in another industry entirely. If the injured worker must take a lower paying job, or work in a diminished capacity because of their injury, if they lose a limb or suffer any permanent impairment, Delaware worker’s compensation will pay benefits based on a percentage of “scheduled” and “non-scheduled” losses.

If an employer gets caught misclassifying employees as contractors, they will face fines and have tax consequences. In some cases, they may face investigation by the U.S. Department of Labor depending on the size of the company, how many workers are misclassified and whether there is evidence that the employer intentionally misclassified the workers.

Just because your employer says that you are an independent contractor does not make it so. The Fair Labor Standards Act (FLSA) has a fact sheet that has information about misclassification as an independent contractor.

If you have been injured in a workplace accident and you are dealing with a conflict with your employer’s workers’ compensation insurer, we are here to help. Our skilled workers’ compensation attorneys are ready to take your case and protect your right to fair compensation when you been injured at work. We encourage you to call Silverman, McDonald and Friedman 302-888-2900 or complete our contact form. Our Wilmington, Newark, and Seaford workers’ compensation attorneys are standing by to represent your interests.