Independent Contractors: How Worker’s Compensation Exemption Affects You

In 2020, 2.7 out of every 100 full-time workers were injured on the job.

Becoming injured at work can be financially devastating and dealing with insurance is often overwhelming. This is especially true for independent contractors.

Did you know that as an independent contractor, you might not qualify for workers’ compensation benefits?

Keep reading to learn more about workers’ comp for independent contractors and how North Carolina’s workers’ compensation exemption affects you. 

What is Workers’ Compensation Insurance?

Workers’ compensation insurance is purchased by employers to provide coverage for their employees if they become sick or injured on the job.

Workers’ comp policies offer benefits to help cover medical costs for work-related illness and injuries as well as lost wages. If an employee claims these benefits under their employer’s workers’ compensation policy, they will waive their right to sue their employer for damages. Unfortunately, navigating workers’ comp claims is rarely as straightforward as it may seem. 

How Does Workers’ Compensation Work for Independent Contractors?

When most people think of workers’ comp insurance, they think of traditional employer-employee relationships. But the truth is, workers’ compensation can be extended to include independent contractors as well -sometimes.

Each state has its own laws that regulate employers and workers’ comp insurance. So whether or not you qualify as an independent contractor usually depends on where you conduct business and the contract you sign.

If you’re a sole proprietor, you probably won’t be required to purchase workers’ comp insurance for yourself. But, if you’re a contractor and enter into a contractual relationship with another business, you may be contractually required to purchase this insurance.

Health insurance policies usually exclude injuries and illnesses that arise from work-related incidents. However, you might not have the coverage you think.

In some states, independent contractors are automatically exempted from coverage. And in some cases, independent contractors can apply for a waiver or exemption. 

What Are Workers’ Compensation Exemptions?

What happens if you’re an independent contractor who isn’t required to purchase your own coverage? Certainly, you would be covered under the policy of the business you are doing work for, right?

Not necessarily. Because independent contractors are considered self-employed and not employees, you may be exempt from coverage. If a business incorrectly classifies your employment status, it may be subject to fines and penalties.

In North Carolina, independent contractors are automatically exempted from workers’ compensation coverage. So, if you are injured or become ill on the job, you won’t qualify for benefits the way an employee would.

If you find yourself in this situation, don’t give up just yet. You still may be able to fight for your right to compensation. 

Were You Injured on the Job?

If you were the victim of a work-related illness or injury, you deserve compensation.

If you’re an independent contractor and being denied benefits because of a workers’ compensation exemption, you need an attorney on your side. Workers’ compensation laws can be confusing, especially when you’re not feeling your best because of a workplace accident.

Let us fight for your rights. Click here to schedule a consultation with one of our experienced workers’ compensation lawyers today.