To be entitled to workers’ compensation benefits, the injured worker must be an employee. An independent contractor is not entitled to benefits. The fact that an employer may designate a worker as an “independent contractor” and issue to him a 1099 instead of a W-2 is not dispositive.
The Supreme Court of North Carolina has established that the question of whether an injured worker is an employee or an independent contractor is governed by eight factors. See Hayes v. Bd. of Trustees of Elon College, 224 N.C. 11, 29 S.E.2d 137 (1944).
The eight factors are whether the person employed:
- Is engaged in an independent business, calling or occupation;
- Is to have the independent use of his special skill, knowledge or training in the execution of the work;
- Is doing a specified piece of work at a fixed price or for a lump sum or upon a quantitative basis;
- Is not subject to discharge because he adopts one method of doing the work rather than another;
- Is not in the regular employ of the other contracting party;
- Is free to use such assistants as he may think proper;
- Has full control over such assistants; and
- Selects his own time.
Each case is examined on a case-by-case basis and there is no “magical” combination of factors that will answer the question one way or another. From a practical standpoint, the lists below give guidance.
The worker might be an EMPLOYEE if:
- He has no special skill or expertise on his own;
- He cannot accomplish the task himself using his own personal knowledge;
- The Employer instructs and/or supervises him on where to work and what to do;
- He can be fired for doing the job one way as opposed to another;
- He works or has worked for the Employer in another capacity or at another site;
- He is paid by the hour or based on production;
- He is not free to hire a helper; and
- The Employer sets his schedule (days and/or hours).
The worker might be an INDEPENDENT CONTRACTOR if:
- He does have special expertise (Example: plumber, electrician);
- He can accomplish the task using that expertise without instruction or supervision;
- He will not be fired as long as he accomplishes the task assigned in a satisfactory manner;
- He uses his own tools and equipment;
- He can hire and fire his own helpers without permission from the Employer;
- He is allowed to set his own schedule;
- He is paid for the “job”, not by the hour/production; and
- He is not supervised by the Employer.
Usually, the degree of supervision over the worker is the most important factor to be considered but practically, all will be considered. The Industrial Commission is unlikely to deny an injured worker benefits unless the evidence is overwhelming that the worker was indeed an independent contractor.
If you have questions about a specific claim, you may reach out to me directly at email@example.com or 919-863-8733.