Employees injured on the job are entitled to workers’ compensation benefits. Companies are not required to provide workers’ comp insurance for independent contractors or self-employed construction workers. Under New York law, there are strict requirements for a worker to be classified as an independent contractor instead of an employee. In some cases, an “independent contractor” on a construction site may actually be an employee under the law.

How Is the Independent Contractor Relationship Defined in New York?

Under New York law, independent contractors are in business for themselves and offering their services to the general public. They are free from direction, control, and supervision in the performance of their duties. For example, independent contractors:

  • Can refuse offers of work
  • Set their own schedules
  • Pay their own expenses
  • Set or negotiate their own pay rates
  • Offer services to other businesses
  • Keep a place of business and invest in equipment, supplies, and facilities
  • May choose to hire help

When May an Employer-Employee Relationship Exist, Regardless of How It is Described?

Just because an employer gives a worker a 1099 rather than a W-2 at the end of the year, that does not necessarily make the worker an independent contractor. He or she may still qualify as an employee under the law. The distinction between an employee and an independent contractor is based on several factors, including the level of direction, control, and supervision exercised by the party who engages the worker’s services. An employer-employee relationship can exist, regardless of what the people involved call it.

Agreements made by employees to waive their rights are not valid under Unemployment Insurance Law. The statute states at § 595, “Benefit right inalienable. 1. Waiver agreement void. No agreement by an employee to waive his rights under this article shall be valid.

How Is a “Separate Business Entity” Defined by the State of New York?

Under state law, there is a 12-part test to determine whether a business entity (corporation, partnership, or sole proprietorship) is considered a separate business entity from a contractor to which it is providing services. It is only considered a separate business entity if:

  • It is performing service free from direction or control over the means and manner of providing the service, except for the right of the contractor to specify the desired result;
  • It is not subject to destruction or cancellation if the relationship with the contractor is severed;
  • It has substantial investment of capital in the entity beyond ordinary equipment and tools and a personal vehicle;
  • It owns the capital goods, gains the profits, and bears the losses of the business entity;
  • It makes its services available on a continuing basis to the business community or general public;
  • It includes services rendered on a federal income tax schedule as an independent business;
  • It performs services for the contractor under its own name;
  • It obtains and pays for licenses or permits, when required, in its own name;
  • It furnishes the necessary tools and equipment to provide the service;
  • It hires and pays its own employees when necessary, without contractor approval or reimbursement, and reports it to the IRS;
  • It is not represented as an employee by the contractor to its customers; and
  • It has the right to perform similar services for others whenever it chooses.

Why Is It Essential to Seek the Guidance of a Workers’ Comp Attorney If You Have Been Injured On a Construction Site?

Whether you are officially listed as an employee or as an independent contractor, if you have been injured on a construction site, speak with an experienced workers’ compensation lawyer as soon as possible. At Wingate, Russotti, Shapiro, Moses & Halperin, LLP, we can tell you if you actually qualify as an employee, entitled to workers’ comp benefits. We can investigate your accident to determine if you may have a personal injury claim against a party whose negligence contributed to your injuries, and we can help you pursue the benefits you are entitled to receive. Call us today at (212) 986-7353.

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