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The Law Office of Alan S. Rubin
A Louisville attorney practicing since 1987

Understanding the impact of worker misclassification on workers' comp

The law is incredibly clear here in Kentucky as to the circumstances in which employers are required to provide workers' compensation coverage: Whenever a business employs one or more employees, it must maintain coverage with no exceptions recognized for part-time, temporary or even family employees.

Indeed, the failure to carry work comp coverage can have major consequences, as state law dictates that non-compliant employers are subject to fines of $100 to $1,000 per employee -- with each day constituting a separate offense -- and may be held responsible for covering injured employees' income benefits (lost wages, medical expenses, etc.).

Despite these rather stringent penalties, the unfortunate reality is that some employers will nevertheless decline to secure the necessary work comp coverage, or even attempt to trick the system by misclassifying their employees as independent contractors, who are not otherwise entitled to coverage.     

This naturally raises the question as to how the courts distinguish between employees and independent contractors. While there is no defined checklist, there are certain criteria that courts consider highly persuasive in determining whether a worker is an independent contractor:

  • The work being performed is not a regular and/or recurring part of the employer's business, and is being performed on a project basis (i.e., with a beginning and end date).
  • The worker provides his or her own equipment and materials, and can profit or lose on the venture.
  • The worker receives no training/instruction from the employer, can retain assistants and has final control over the job.
  • The worker has a specialized set of skills, and maintains a separate place of business.
  • The worker has executed a written contract with the employer setting forth their respective obligations, including the project to be completed, dates, and prices.

As is clear by the foregoing, this can prove to be a complex process. If you have suffered a serious work-related injury, and your employer is attempting to claim that you are an independent contractor or the insurer is denying payment for another reason, consider speaking with a skilled legal professional.

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