Are Freelancers Eligible for Workers’ Compensation?

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workers compensation, worker's compensation, workers compensation facts

People used to think mothers who stayed home with the kids were lazy. Individuals now have the option to work full time from their homes, and more and more people are doing so. However, when freelancers are injured they often wonder how they’ll cover their medical bills and lost time from work.

Workers Compensation in the Workplace

Are freelancers eligible for worker’s compensation? 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. In Kansas, if the employer’s annual gross payroll is less than $20,000 they are not required to carry workers compensation.

In Michigan, state law requires 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, if your work-related injury or illness was caused by a third party you could possibly get that party to pay you for your pain and suffering. Do keep in mind, 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 the company, it’s not required that they are protected. 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. Despite this, the ill-gotten gains that employers receive due to these actions are sometimes seen as worth the risk.

Why Employers Misclassify Employees

Top Risks Faced by Business Owners

Infographic created by-Coverhound

There are actually a variety of reasons that employers will misclassify an employee as an independent contractor. Yes, this can also occur 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. 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 could point towards a person 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.

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. 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.

Krystle Cook - the creator of Home Jobs by MOM - put her psychology degree on a shelf and dived into a pile of diapers and dishes instead. She is a wife and mother to two rambunctious boys, sweating it out in her Texas hometown. She loves cooking, DIY home projects, and family fun activities.


  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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