Employees vs. Independent Contractors

By: RKM

Workers’ compensation benefits are only payable to an “employee” as defined by the Maine Workers’ Compensation Act. Accordingly, when involved in a workers’ compensation claim, it is important to know whether you are, or an injured worker is, classified as an employee or an independent contractor to determine eligibility for benefits.

While this distinction may seem straightforward at first glance, it might be unclear whether a worker is an independent contractor pursuant to the Act. The current statutory scheme provides that a worker is presumed to be an employee unless the employing unit can prove that the worker is “free from the essential direction and control of the employing unit” and meets other certain criteria contained in the statute. For example, the worker must be “customarily engaged” in the trade or profession and also have “opportunity for profit and loss as a result of the services being performed.” Other criteria that are persuasive, but not required, include whether the parties have a contract or an exclusive relationship with one another. There are additional considerations pertaining to persons working on construction sites.

In addition to affecting liabilities under the Maine Workers’ Compensation Act, employee verses independent contractor status can be relevant to other issues from taxes to the need for general liability insurance. If you have any questions about a workers’ classification or your own classification, you should speak to an experienced attorney.

Published: 11/06/2018