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What Independent Contractors Need to Know about Worker’s Compensation

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Patrick B. ReddyWhat Independent Contractors Need to Know about Worker’s Compensation

By Patrick B. Reddy, Attorney at Law

“Independent contractor” is a term that gets thrown around a great deal in the working world. People commonly refer to themselves as “contractors” when they have a special employment relationship or when they run their own business. But in Washington State, the term “Independent Contractor” has a very particular meaning when it comes to workers’ compensation.

Workers’ Compensation

Prior to 1911, injured workers spent years in litigation with job injury claims for negligence and often were denied access to the medical treatment and support they needed in order to return to the workforce.

The workers’ compensation system was born in response to the large drag that workplace injuries had on the work-sector for both employers and employees. The workers’ compensation system is a “no-fault” system, where workers no longer have to try cases in front of a court in order to receive medical damages and wage compensation for time lost from work or to pay for medical treatment.

Workers’ compensation in Washington State is governed by Title 51 of the Revised Code of Washington (“RCW”) and administered by the Department of Labor and Industries. The workers’ compensation system is an insurance fund, which is financed by mandatory premiums paid by employers. Premiums are calculated by how a particular job is classified and the risk class assigned to the classification. In return for paying into the system, employers are free from liability for accidents that occur in the workplace, unless the employer “intends” to injure the worker. Employers and workers may not exempt themselves from the burdens or waive the benefits of the Industrial Insurance Act, with only a few narrowly construed exceptions.

This makes nearly every person in Washington—whether they think so or not—an “employee” or a “covered worker.”

When to Pay Premiums

Title 51 determines who is an employer and an employee, for purposes of whether an employer has to pay insurance premiums on the worker and whether the worker is entitled to receive benefits. For most workers, whether their employer pays premiums on the worker is clear-cut. When it comes to independent contractors, the statute is less clear.

Washington State has one of the highest standards in the country for determining whether an individual qualifies as an independent contractor. This standard is higher than the federal standard. It is the threshold by which persons should judge whether they are, or have working for them, independent contractors. Washington maintains such a high standard in order to ensure that all injured workers are able to receive medical attention needed as a result of on-the-job injuries.

Exempt from Coverage

As a result of this standard, it is important for employers to make certain that all persons are covered by workers’ compensation insurance, or that the individuals are clearly exempt from coverage.

Remember that if you employ independent contractors and own the property that they are working on, you owe the contractor’s employees a duty to keep the premises reasonably safe and are not immune to liability due to your own negligent acts or omissions. Also keep in mind that anyone you work with may be considered an “employee” or “covered worker” even if you think they are “independent.”

Patrick Reddy is a member of Emery Reddy, PLLC, and litigates workers’ compensation and employment matters throughout Washington state.