Employees vs. Independent Contractors in NC Workers' Comp Cases

Employees vs. Independent Contractors in NC Workers' Comp

📌 Key Takeaways:

  • Worker classification in North Carolina workers’ comp cases depends on the actual working relationship—not job titles.
  • Employees are generally covered by workers’ compensation for work-related injuries, with limited exceptions.
  • Independent contractors may only qualify for workers’ comp benefits in specific, limited circumstances.
  • Courts examine factors like employer control, job permanency, and who supplies tools or equipment.
  • The more control an employer has over a worker’s duties and schedule, the more likely the worker is an employee.
  • Misclassification can affect your right to benefits and whether you should pursue a workers’ comp or personal injury claim.

If you sustain an on-the-job injury in North Carolina, you need to know the difference between how employees and independent contractors can seek compensation. Workers’ compensation for independent contractors may be available in very specific situations. Employees, on the other hand, are always covered for compensable injuries, except in a few circumstances.

Contact Kornbluth Ginsberg Law Group, P.A., for a free consultation with one of our experienced NC workers’ compensation lawyers. If you are an employee or an independent contractor injured on the job, our lawyers can help you make the correct decision to pursue a personal injury case or workers’ compensation claim.

Call us 24/7 at 919-980-9895 or complete our contact form for a free consultation. One of our offices is conveniently located at 3400 Croasdaile Drive, Suite 300. Durham, NC. We are ready to help you understand your legal options.

Employee vs. Independent Contractor: Key Differences

Knowing the key differences between an employee and an independent contractor can help you identify your correct job classification. The classification is important because employees typically have additional workers’ rights that are protected under federal and state law.

It is important to note that the workers’ compensation system looks at the actual relationship between the worker and the employer, not simply what the worker is called. In other words, workers are not necessarily treated as independent contractors under North Carolina law simply because employers call them that.

According to the North Carolina Department of Labor, factors the courts use to determine whether a worker is an employee or an independent contractor include:

  • The extent to which the worker’s services are an integral part of their employer’s business
  • The permanency of the relationship between worker and employer
  • The amount of the worker’s investment in their facilities and equipment
  • The nature and degree of control the employer has over the employee
  • The worker’s opportunities for profit and loss
  • The amount of initiative, judgment, or foresight in open market competition the worker needs for their success
  • The degree of independent business organization and operation that the worker has

Other things to consider are whether the worker is paid hourly or by the job, whether the worker brings his/her own tools to the job or if the job provides them, if there are set arrival and departure times from work, and whether the worker has his/her own business and can bring helpers to the job.

Generally speaking, the more control an employer has over how, when, and where the worker performs their job, the more likely it is that the worker is an employee and the employer must provide workers’ compensation coverage.

Can an Independent Contractor in NC Get Workers’ Comp if Injured?

When it comes to workers’ compensation and independent contractors, the general rule is that true independent contractors are not eligible for workers’ comp benefits. However, there are several key exceptions to the rule, so you should not automatically assume that you do not qualify for benefits just because your employer classifies you as an independent contractor.

One exception is if your employer purchases a voluntary compensation endorsement from their workers’ compensation insurance provider. The endorsement extends benefits equal to workers’ compensation benefits to other workers who would typically not be covered, such as independent contractors.

Another exception is if your employer misclassifies you as an independent contractor when you are actually an employee. When determining a worker’s eligibility for workers’ compensation benefits, the courts look at the employer/employee relationship, not the label the employer places on the worker.

Lastly, subcontractors and workers’ compensation can interact a bit differently from other contractors and workers’ compensation. If a subcontractor is injured on the job, they may be covered by the general contractor’s insurance.

Steps you can take to protect your right to workers’ compensation benefits include:

  • Documenting the work you perform for your employer and the amount of control your employer has over that work
  • Keeping copies of paychecks
  • Keeping copies of timesheets or documents that show an hourly rate
  • Gathering evidence that connects your injury to the work you performed for your employer
  • Hiring a workers’ compensation lawyer to handle your case

Legal Risks of Employers Misclassifying Workers in NC

Employers who misclassify workers as independent contractors can face significant legal risks. Employees are afforded certain protections under labor laws like the federal Fair Labor Standards Act and North Carolina’s Wage and Hour Act. If your employer misclassified you as an independent contractor, you may be entitled to compensation for how that misclassification affected your wages, overtime pay, tips, and taxes.

If you are not classified as an employee, to recover compensation for workplace injuries, you may have to file a personal injury claim against your employer. That can make it more challenging to recover the compensation you need because personal injury lawsuits require you to prove your employer’s liability for your injuries. That is not the case in workers’ compensation claims, which require no proof of fault on the employer’s part.

If you file for workers’ compensation benefits while being misclassified by your employer, it could lead to the insurer denying your claim. While a claim denial will postpone any benefits you could be eligible for, our workers’ compensation lawyers may be able to help you resolve the issue.

Common Disputes in Contractor Workers’ Comp Claims

Several types of disputes involving workers’ comp insurance for contractors may arise in your work injury case.

Some of the most common disputes in workers’ comp claims are:

  • Coverage denials – Your employer’s workers’ comp insurance provider may try to deny your claim for various reasons. When a denial occurs, our workers’ compensation lawyers can review the denial and file an appeal on your behalf.
  • Injury disputes – Your employer or their insurer may dispute that your injury qualifies as a work injury, or they might dispute its severity. Our attorneys can help you secure and present the medical evidence necessary to support your claim.
  • Employer misclassification – If your employer misclassifies you as an independent contractor, you may have to demonstrate in court that you are actually an employee. Our lawyers can collect the evidence necessary, build a solid case, and represent you during hearings.

Common Issues: Ghost Policies and Coverage Gaps

NC workers’ comp ghost policies can sometimes mislead contractors into thinking they have insurance coverage. Ghost policies are policies that business owners sometimes buy when they are required to purchase workers’ compensation coverage, but they do not have any employees. Ghost policies basically count as proof of workers’ compensation coverage without providing any insurance benefits.

If your employer has a ghost workers’ compensation policy, you may believe you are covered by workers’ compensation insurance when you actually are not. For that reason, it is always recommended that you understand what insurance your employer has and speak with our workplace injury lawyers to learn more about your rights.

Get Help from Our North Carolina Workers’ Compensation Attorneys Now

A successful workers’ compensation claim can provide important benefits, including coverage of medical bills and partial replacement of lost wages. It is crucial that you know your legal rights when dealing with a workplace injury. You need help from our knowledgeable attorneys to handle worker misclassification and other potential barriers on your path to receiving benefits.

If you have been injured on the job, contact Kornbluth Ginsberg online for a free consultation or call us 24/7 at 919-980-9895 to get in touch with one of our experienced workers’ compensation lawyers. We always treat clients the way we would want to be treated, which means providing you with regular updates about your case and responding to your calls and messages quickly.