Are Freelancers and Gig Workers Entitled to Workers’ Comp Benefits in NC?

If you are working in North Carolina, you might be wondering are freelancers and gig workers entitled to workers’ comp benefits in NC? Generally, North Carolina’s freelancers and gig workers are considered independent contractors and are not entitled to benefits under workers’ compensation. However, there are some exceptions, and it’s worth understanding a bit more about North Carolina’s workers’ comp benefits eligibility.

Independent Contractors in North Carolina

If you are a freelancer or gig worker, North Carolina considers you an independent contractor (1099 employee) – not an employee. Independent contractors are entitled to control their schedules and methods of work. However, they are responsible for their own benefits/taxes and are not covered by the North Carolina Workers’ Compensation Act. As a freelancer or gig worker, you are not entitled to workers’ comp benefits if you are hurt while on the job.

As of 2021, gig workers have more than tripled in number over the previous four years and have made a significant economic impact. However, freelancers and gig workers – classified as independent contractors – are generally not entitled to workers’ compensation benefits in North Carolina, which means employers aren’t obligated to provide benefits coverage. There might be specific circumstances where independent contractors are required to carry their own insurance or have workers’ compensation coverage.

Other Coverage Options

If you work as a freelancer or gig worker in North Carolina, you can explore other avenues for coverage, including purchasing your own workers’ comp insurance or securing personal insurance. If you are hurt while working as an independent contractor, then you’ll typically have coverage for your medical bills, wage loss, etc.

The Potential for Misclassification

Employers, sometimes intentionally, misclassify workers as independent contractors when they should have been considered employees. This misclassification allows employers to avoid contributing towards workers’ comp benefits and could result in employer legal issues and penalties. As an employee, it is important to be aware of the potential to have been erroneously misclassified as an independent contractor and precluded from getting benefits.

If you work in North Carolina and have been misclassified as an independent contractor when you should have been considered an employee, you might be eligible for workers’ compensation benefits under the NC Workers’ Compensation Act.
The determination of whether you are an independent contractor or not often hinges on individual circumstances like your degree of control over your work, whether you solely rely on your employer for income, and the nature of your work performed.

Hypothetical Examples of Misclassification

In North Carolina, it is unlawful for an employer to misclassify employees as independent contractors. Some hypothetical examples of misclassification could include:

• Construction Industry Cases: Hypothetically, a worker using tools provided by their employer and performing construction duties might be inadvertently issued a 1099 form (rather than a W-2) and could face an initial denial of benefits if hurt because they have been misclassified as an independent contractor. They could be reclassified as an employee and become eligible for benefits.
• Workers Using Their Own Tools: A worker providing and using their own tools could be misclassified as an independent contractor. Later, they could be reclassified as an employee for workers’ compensation benefits after sustaining on-the-job injuries.
• Transportation Workers and Cable Installers: Hypothetically, a worker might be told they are an independent contractor (especially if they use their personal vehicle or sign a subcontractor agreement). But, even if they decide their own schedule, route, and work methods, they might qualify as an employee.

If an employee is hurt while working for a company, benefits might initially be denied, but benefits can be approved once an employee proves that their employer has maintained control over their work.

These are hypothetical scenarios designed to explore situations that could happen in North Carolina with employees potentially misclassified as independent contractors who should be considered employees for workers’ comp purposes. If you were potentially misclassified, it is important to speak with a trusted North Carolina workers’ compensation lawyer about your rights.

FAQs

Q: Are All North Carolina Employers Required to Provide Workers’ Compensation?

A: In general, most North Carolina employers must maintain workers’ compensation insurance. Employers with at least three employees must have workers’ comp coverage, including corporations, partnerships, sole proprietorships, and limited liability companies (LLCs).

Employers that fail to provide workers’ comp can face fines, criminal charges, etc., and employees can pursue legal claims in court. Employers are not required to provide coverage for independent contractors, but employers misclassifying employees can face serious penalties.

Q: Are There Exemptions to the Requirement for Employers to Provide Workers’ Comp?

A: In North Carolina, there are only a few exemptions to the requirement that employers maintain workers’ comp insurance, including employers that retain casual employees, agricultural employees, those with irregular hours or who leave routinely, federal government employees, and more. Some remote workers are included in workers’ comp coverage.

If you have concerns that your employer may not be exempt from having to provide you with coverage, contact a knowledgeable attorney.

Q: Is a 1099 Employee an Independent Contractor?

A: If you are a 1099 employee, you are considered an independent contractor in North Carolina rather than a full-time employee of a company. 1099 employees may also be called freelancers or self-employed workers.

As a 1099 employee, you generally are ineligible for workers’ compensation benefits. However, if you were erroneously misclassified, contact a lawyer to explore your legal recovery options.

Q: Why Should I Consult an Attorney as a Freelancer or Gig Worker?

A: An experienced attorney can provide invaluable help to a freelance or gig worker in North Carolina. An attorney can provide reliable legal assistance and increase the likelihood that you will get the benefits to which you are entitled. They can help explore your legal options and ensure you ultimately make the right decision for your case.

Consult Experienced North Carolina Workers’ Comp Attorneys

Contact Ayers, Whitlow & Dressler to discuss any questions you may have about eligibility for workers’ comp as a freelancer or gig worker in North Carolina,

Our law office is conveniently just off I-277 in the heart of Charlotte. Also, we are close to nearby mass transit, such as the Charlotte Area Transit System or the LYNX Blue Line.

Contact us for an initial consultation right away.