We start with the general proposition: most Florida employers are required to carry workers’ compensation insurance coverage for employees. Workers’ compensation benefits are designed to help cover the costs of lost wages and medical expenses for work-related injuries sustained by employees. The Florida Workers’ Compensation Act specifically excludes the obligation of an employer to provide coverage for independent contractors. Independent contractors, except those in the construction industry, are not employees. There are also several types of jobs which are (generally) independent contractors by statute: real estate agents, entertainers, truck owner-operators, horse exercise riders, and drivers for hire, among others. However, there are other positions where it may be a “close call”, and could mean the difference between having coverage and entitlement to benefits or not. Therefore, correctly determining whether an individual is truly an independent contractor not eligible for coverage or an employee eligible for coverage is a vitally important matter.
The law provides that independent contractors are employees unless they meet the following conditions 440.02 (15)(d)(1), Fla. Stat (2015):
a. In order to meet the definition of independent contractor, at least four of the following criteria must be met:
(I) The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;
(II) The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal regulations;
(III) The independent contractor receives compensation for services rendered or work performed and such compensation is paid to a business rather than to an individual;
(IV) The independent contractor holds one or more bank accounts in the name of the business entity for purposes of paying business expenses or other expenses related to services rendered or work performed for compensation;
(V) The independent contractor performs work or is able to perform work for any entity in addition to or besides the employer at his or her own election without the necessity of completing an employment application or process; or
(VI) The independent contractor receives compensation for work or services rendered on a competitive-bid basis or completion of a task or a set of tasks as defined by a contractual agreement, unless such contractual agreement expressly states that an employment relationship exists.
(I) The independent contractor performs or agrees to perform specific services or work for a specific amount of money and controls the means of performing the services or work.
(II) The independent contractor incurs the principal expenses related to the service or work that he or she performs or agrees to perform.
(III) The independent contractor is responsible for the satisfactory completion of the work or services that he or she performs or agrees to perform.
(IV) The independent contractor receives compensation for work or services performed for a commission or on a per-job basis and not on any other basis.
(V) The independent contractor may realize a profit or suffer a loss in connection with performing work or services.
(VI) The independent contractor has continuing or recurring business liabilities or obligations.
(VII) The success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures.
Employment arrangements can be complex and varied. Therefore, whether or not a person is an independent contractor will be based on the specific facts and circumstances between the individual and the employer/business. Classification as an independent contractor may not always be a bad thing, if there was negligence on the part of the business that caused the injury. This is because an employer not covered by the act may not enjoy the benefit of workers’ compensation immunity. If you have questions regarding workers’ compensation, or about the topic of this blog post, Independent Contractors and Florida Workers’ Compensation, please do not hesitate to contact our office for a free consultation.