New Jersey requires all employers, who are not covered by federal programs, to carry workers’ compensation insurance or be self-insured. But, workers’ compensation can be expensive for an employer. So, being that only employees are entitled to receive workers’ compensation benefits, an employer might classify you as an independent contractor rather than an employee in order to avoid paying you benefits under workers’ compensation.
How is Employee defined for the Purpose of Workers’ Compensation in New Jersey?
According to the IRS, you are an employee whenever the manner in which you do your job is controlled by your employer. This applies even in cases where you are given a great deal of autonomy. New Jersey’s Workers Compensation Act provides an even broader definition of “employee”, basically defining an employee as anyone who, “… provides service for financial compensation.”, and this is regardless of whether or not you receive pay stubs or W-2 forms.
In deciding on this issue, New Jersey courts have established that what is most important is whether or not your employer has the legal right to control the details of how you perform your job and whether or not the nature of the work you perform is an integral part of the business activities of your employer.
What is an Independent Contractor?
While the above provides you with a little perspective on who is considered an employee for the purposes of workers’ compensation in New Jersey, it may also be helpful to consider these 10 criteria that are universally employed to identify a worker as an independent contractor rather than an employee:
* You advertise your services through business cards, promotional materials, a website, etc.
* You perform work by way of your own contract, work permit or authority
* You control the manner and time of which your work is performed
* You do work that is dissimilar to the principal business activities of your employer and also work for other business
* You have an Employer Identification Number (EIN) from the IRS, or have filed business or self-employment income tax returns for work or services provided in the preceding calendar year
* You furnish all of the tools and materials necessary to do your job
* You have liability insurance under your own business name and/or federal EIN
* You have recurring business liabilities and obligations
* You work under a particular contract, are solely in charge of the satisfactory performance of your work, are subject to profit or loss in performing the work, and are in the position to succeed or fail if the business expenses exceed your income
* You maintain your own place of business
Contact an Experienced New Jersey Workers Compensation Attorney
This is only a brief overview of criteria that might classify you as an independent contractor and not an employee who is entitled to workers’ compensation benefits. If you have been injured on the job in New Jersey and are in doubt as to your status as an employee, you should seek the advice of an experienced New Jersey workers’ compensation attorney to find out if you qualify for workers’ compensation benefits.