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Can Gig Workers Get Workers’ Comp?

About the Author

Cheryl Roy has built a successful legal career over the years. However, she wanted to reach out to people beyond her practice and decided to do so by writing. Cheryl took it as a personal mission to make legal information more accessible to the public. Therefore, she started sharing her expertise with individuals and businesses facing a legal dilemma. Now she has branched out to many online and offline platforms and works as a collaborative editor for Bader Scott Law Firm.

Can Gig Workers Get Workers’ Comp?

Gig workers are generally not eligible to benefit from workers’ compensation. The only way they may qualify is by being recategorized as employees. This was made possible through legislative changes in some states, like California. Similar changes are under debate in states like Georgia.

While independent contractors do not receive workers’ compensation, there are several options available to protect themselves. They can purchase a policy that best fits their line of work, or they might file a personal injury lawsuit against the employer or a third party, depending on who is responsible for the work-related injury.

The Rise of the Gig Economy

The gig economy is a type of free-market system, in which independent workers take on short-term positions offered by individuals or organizations. Unlike the traditional market economy, workers do not have a long-term career path but lead more flexible careers, with frequent job changes. In a gig economy, jobs are completed by freelancers and independent contractors.

In recent years, the gig economy has truly blossomed. Several reasons led to this rapid progress, but the main driving force was technology. Digital platforms allow stable options for remote work. This has become a growing request even in the traditional job market, as it offers considerably more freedom to workers. However, this is a viable option only for selected jobs.

Another major driving force was the COVID-19 pandemic. This has forced many companies to implement remote work options. Many people faced with unemployment turned to the gig economy to gain some income. Some of the domains that are considered part of the gig economy are:

  • Freelance programming
  • Freelance writing
  • Arts and design
  • Music
  • Construction
  • Accounting
  • Transportation

This does not mean that all people working in these domains are gig workers. However, an important segment of those who work there are freelancers or independent contractors. Many of them have part-time jobs – sometimes alternating between several part-time jobs – or take on project based work.

Therefore, the main drawing force of the gig economy is flexibility and freedom. Yet there are some downsides to it, as the lack of workers’ compensation.

Employee vs. Independent Contractor

This is the main question to ask when discussing workers’ compensation. Employees usually benefit from the security offered by a workers’ comp, while independent contractors do not.

The main similarity between an employee and an independent contractor is that they both offer their services to a company. Employees have their schedule and daily tasks outlined for them, and they answer to their superiors in the organizational hierarchy. Also, they receive a series of benefits, including:

  • Workers’ comp
  • Health insurance
  • PTO
  • Disability and life insurance

Independent contractors are considered their own bosses. They decide on their work schedule and daily tasks. Since independent contractors are not covered by the same laws as employees, they pay for their taxes, including Medicaid and Social Security. This means that if they suffer a work-related injury, they are responsible for covering all related costs.

However, contractors and subcontractors can be categorized as workers when their services are retained by a business. If they work on behalf of a corporate entity and get paid directly, then the employer has to cover their workers’ compensation.

One way to tell apart the two forms of work is by the tax forms they deal with. An employee receives a W-2 from their employer, while contractors get 1099 from clients. However, determining which category someone better fits into is not always easy. Georgia state legislatures are currently trying to create a better classification system for workers in the gig industry, especially since this is considered to be a booming sector.

Is There a Way for Gig Workers to Get Around Worker’s Comp?

Workers’ compensation is a means for employees who suffer a work-related injury or illness to be reimbursed. The benefits can cover medical expenses, lost working hours, and future wage loss.

Since gig workers are not covered by workers’ compensation, they are left to deal with any work-related injuries or illness on their own. There are several ways to tackle this. Gig workers can opt to insure themselves. Independent contractors can cruise the market to find the best policy deal available for them.

The other available option is to file a personal injury claim against the employer or a third party. The chosen path depends on the specific situation in which the incident has occurred. If the employer is in any way responsible, then it might be viable to direct the lawsuit against them. However, if the employer is in no way involved, the lawsuit could target a third person. For example, a gig worker could file a claim against the manufacturer of a faulty product that caused the injury; or if they were involved in a car accident, file the suit against the other driver.

The laws and legislations are constantly evolving. An important step for labor laws covering gig workers was made in 2019 when California passed AB5. The new law extended certain wage benefits to include some gig workers. This was made possible by re-categorizing some independent contractors as employees. Hopefully, more states will follow suit, considering the rapid expansion of the gig economy.

In Georgia, a similar legislative change is currently under discussion. Therefore, if an independent contractor has suffered any injury while working, the best thing to do is contact an Atlanta workers compensation lawyer. They will be up to date with the latest legislation and are qualified to offer guidance on the best course of action to pursue.

Final Thoughts

The rapid growth of the gig economy leaves legislatures trying to catch up. As more people transition to work as independent contractors, it becomes an increasing concern to offer them legislative protection. Until that day, it is up to each freelancer to decide on the best way to protect themselves from the currently available options.