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Phoenix Workers’ Comp Benefits for an Independent Contractor

Work Injury Claims For Independent Contractors

If you’re an independent contractor, there are many perks and benefits you don’t get such as paid time off and health insurance. Workers’ compensation is another benefit that is only available to employees — as many contractors discover when they suffer from a work-related injury.

If you find yourself in this situation, it’s a good idea to consult an experienced Phoenix workers’ compensation lawyer in getting to know your benefits as an independent contractor. As with other injury claims, you may have more options than you think, and the only way to really find out if you have a valid claim is to discuss your situation with a lawyer.

You Can Rely On Crossman Law Offices, P.C.

For workers in Phoenix and the surrounding areas who need legal advice, Crossman Law Offices, P.C., is an excellent choice. Workers’ comp is all we do, and we have been doing it for decades. We know this complex, fact-based area of law inside and out, and we are aware of recent changes to state laws and regulations. We are committed to fighting for the rights of injured workers, and to offer exceptional client service.

Are You Really A Contractor?

We have seen many cases where a company will misclassify an employee as a contractor in order to avoid paying benefits. You may think you are an independent contractor, when in fact you were working as an employee. An administrative law judge will consider the totality of your circumstances to determine your true status in the eyes of the law.

The Right To Sue

For employees, workers’ comp is generally the only legal remedy available. But if you are in fact an independent contractor, suing your employer for negligence may be an option. We’ll use our knowledge and experience to help you explore all your options, so you can pursue the path that’s right for you.

How Misclassifying Workers As 1099 Employees Affects Workers’ Compensation

A misclassified worker is ineligible for workers’ compensation benefits. This means that if you are misclassified by your employer and are injured on the job, you will not be able to claim benefits for your injury. Misclassifying workers as 1099 employees also makes them ineligible for minimum wage, unemployment insurance, are forced to pay the full tax for FICA, and ineligible for overtime, and must pay for their own health insurance. The trickle-down effect when misclassifying workers as 1099 employees are great for the government, other employers, and workers.

Companies Avoid Paying Tax

When a company misclassifies a worker as a 1099 employee, that company avoids the following:

  • Paying payroll tax
  • Paying workers’ compensation insurance premiums
  • Do not have to provide the misclassified worker with health insurance
  • Do not have to follow the requirements of the Fair Labor Standards Act
  • Do not have to follow the requirements of the 1986 Immigration Reform and Control Act

Impact on Workers and the Government

Not only do workers suffer if they have been misclassified, but the government also suffers. Misclassified workers are more vulnerable to theft of wages and have reduced bargaining power when the time comes to negotiate salary and other issues in their contracts. 

When it comes to the government, federal and state agencies will lose out on revenue usually acquired on income taxes. The federal and state worker compensation, unemployment insurance, and disability insurance systems will also suffer negatively when workers are misclassified by employers as 1099 employees.

Fines for Misclassifying a Workers as a 1099 Employee

Even if the misclassification was unintentional, the employer might still face fines or other types of penalties from the government. These can include, but are not limited to, the following:

  • A fine levied for every W-2 that the company failed to file with the government
  • Penalties for failing to withhold income taxes
  • Penalties for failing to withhold taxes for Medicare and Social Security
  • Fines for 100 percent of employer tax that has gone unpaid
  • Interest accrues and must be paid on all unpaid taxes and penalties until they are paid
  • For every month that the taxes are delinquent, the company is fined up to 25 percent of the unpaid tax

Should a Company Provide a 1099 Worker with Workers’ Compensation?

If there is any doubt about workers’ compensation being provided to a 1099 worker, a company can still purchase the coverage for that specific worker. A 1099 employee can also purchase their own workers’ compensation coverage, if you deem it necessary. The 1099 employee can also request to be covered by the employer under their current policy.

Form SS-8 (Determination of a Workers Status for Purposes of the Federal Taxes and Income Tax Withholding with the IRS) can be filed by either the 1099 worker or the employer. Until the company receives a determination from the IRS about the worker, all taxes should be paid to avoid any penalties or fines. If the company unintentionally misclassified a worker as a 1099 employee, there is a process available for reclassification, which can drastically reduce the fines the company will be required to pay. The company will still need to pay back wages, penalties, and interest for the misclassification of an employee even if it was unintentional. If you need help with this, please reach out to our skilled Phoenix employee rights attorneys.

Schedule Your Free Consultation Today With An Attorney

It costs you nothing to discuss your case with us — and if you decide to file a claim for compensation, you’ll pay no fees unless we help you receive benefits. So don’t give up until you’ve gotten sound advice. Contact us by email or call Crossman Law Offices, P.C., at (602) 248-0380 to speak with one of our lawyers.