The law usually considers freelancers or gig workers as independent contractors. Workers’ compensation generally covers independent contractors only if they apply for elective coverage.
However, employers sometimes misclassify certain workers accidentally or intentionally. In those instances, workers may qualify to receive benefits, and authorities may assess penalties on employers for misclassification, whether it was an honest mistake or not.
The key word here is “may,” and as with any individual case, the answer will always be “it depends.” Each case is different, and different circumstances will return different answers. Let’s look closely and see how the law applies to freelancers.
Elective coverage
Self-employed individuals, like freelancers, can choose to apply for elective coverage. Under this rule, they pay both the employer and employee parts of their contributions. The state calculates the premium based on reported wages, with a minimum and maximum reportable amount.
Independent contractor classification
Misclassifying individuals as independent contractors creates confusion. In a final ruling by the U.S. Department of Labor, effective March 11, 2024, new guidelines were put in place. These guidelines use the following factors to determine if someone is a contractor or an employee:
- Is the wage or profit dependent on the individual’s skill or the company’s policy?
- Who made the larger capital investment for the work?
- Is the work temporary or permanent?
- Who controls the work conditions?
- How integral is the work to the employer’s business?
Under the Fair Labor Standards Act, a worker is an employee if they are economically dependent on the employer. If they work full time or their employer prevents them from looking for other clients, they may have a misclassification case.
Further guidance
If you are unsure about your eligibility for worker’s compensation, consider seeking legal advice. The law for freelancers is not always clear, so getting professional guidance may be helpful.