Are Freelancers Eligible for Workers Compensation?

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officeThere was once a point in time when staying home with the kids or simply being a homemaker meant that a person couldn’t work. Thanks to advanced technologies like the Internet, however, this time is long gone. Individuals now have the option to work full time from their homes, and more and more people are doing so. When freelancers working from home are injured, though, they’re often left wondering how they’ll cover their medical bills and lost time from work.

Fortunately, it’s not always the case that they’re on their own. The question of whether or not freelancers are eligible for worker’s compensation may seem straight forward, but it’s actually more complex than most people realize. The simple answer is “no,” and many people work from this assumed-common knowledge. In reality, though, there are times when this assumption can result in an individual missing out on compensation benefits.

Most states are required to carry workers compensation if they have more than one employee. However states like Alabama leave it up to the employer how they implement the program. In Kansas if the employer’s annual gross payroll is less than $20,000 they are not required to carry workers compensation for their employees. According to Stroble Law, workmans compensation lawyers in Michigan, the laws of that state require all employers, private and public to carry workers compensation for all employees. If you are an independent contractor and not an employee, you would not be able to claim workers compensation benefits. However, as a freelancer “you may be entitled to recover damages from a third-party for your pain and suffering if you can prove that a third-party is responsible for your work-related injury or illness. Third-party claims are not governed by Michigan workers’ compensation laws.”

The truth of the matter is that independent contractors, who numbered over 10 million in 2010, don’t fall under workers compensation laws. Since they’re not direct employees of a company, it’s not required that they be protected under this law. There are times, though, when an employer may classify a person as an independent contractor when they’re actually an employee. This is an illegal act that can get an employer in serious trouble, but the ill-gotten gains that employers receive due to these actions are sometimes seen as worth the risk.

Why Employers Misclassify Employees

There are actually a variety of reasons that employers will misclassify an employee as an independent contractor, and yes, this can occur even to individuals who are working from home. When an employee is able to classify someone as an independent contractor, for instance, they don’t have to pay payroll taxes on that person. Additionally, they’re able to avoid compliance with other hourly and wage requirement laws. Even the money they save on overtime pay and mandatory rest breaks can be incentive to misclassify someone.

Of course, the most unfortunate reason, at least for those who end up getting injured, is the ability to pay higher premiums for worker’s compensation coverage. Sadly, this has left many injured workers with absolutely no recourse, and the worst part is that they could’ve actually received compensation for their injury and even past wages they would’ve received as an employee. This is why everyone who works from home should understand whether or not they’re eligible for worker’s compensation.

Determining Eligibility

The best thing that a person can do after being injured while working at home is speak with an attorney. While there are a few telltale signs that a person may recognize on their own that could point towards them actually being an employee, there’s really no set definition of what constitutes an independent contractor. A worker’s compensation attorney will know the laws specific to a certain locale and be able to quickly judge whether or not a person is incorrectly classified as a freelancer.

The law usually considers direct control or direction of a worker as an employee-employer relationship. Additionally, things like providing equipment to workers or paying them hourly is something that an employer would likely only be doing for someone who should be classified as an employee. One of the most important things for a person to remember, though, is that even signing an agreement saying that they’re an independent contractor can eliminate the benefits that they are entitled to.

It’s sad that those who work at home have to worry about whether or not they’re being treated fairly, but in a world where everything is about profit, it’s a definite concern that every freelancer should have. Work-related injuries can leave a person unable to work and with mountains of medical bills, and an employer incorrectly classifying a person doesn’t mean that the person isn’t entitled to benefits. With the right legal help, someone who works from home can ensure that they receive the compensation that they deserve.


Teresa Stewart is an ex-corporate grunt turned entrepreneur, website publisher, free-lance writer and author whose travel throughout the US and overseas created a multi-passionate personality. Fueled by experience and curiosity, she enjoys researching and writing in a variety of arenas.


  1. Sandra Lawson says:

    It seems like the freelancer always gets the short end of the stick. There was recently a story online about Self magazine not wanting to publish a photo of a a woman that lost a lot of weight. She had a lot of loose skin and told the woman to send another photo where she was covered up. As soon as the story went viral, they backed up like crawdaddies, blaming it on a misunderstanding with a “freelancer.”

    • That’s sad to hear Sandra. Just because someone is a freelancer doesn’t mean the hard work they do should be diminished.

  2. Holly Chavez says:

    Cool article. I’ll bet it would be tough proving the case, even if they found out you could go to court–the only witness is you or someone in your family, maybe.

    • That’s very true Holly! I guess they would need think pretty hard about the circumstances surrounding the event.

  3. Ken Dowell says:

    So there really is no straightforward answer. Whenever laws are left in the hands of the states they tend to become very confusing and pretty inconsistent. Wonder if the courts will chime on this one?

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