Key Takeaways:
- Independent contractors in Sioux Falls generally are not covered by workers’ compensation in South Dakota.
- Understanding the distinction between employees and independent contractors is crucial for determining eligibility for benefits.
- Misclassifying workers as independent contractors can have serious legal and financial consequences for employers.
- If you are an independent contractor who has been injured on the job, you may have other legal options available.
- Consulting with an attorney can help you understand your rights and explore potential avenues for compensation.
Workers’ compensation in South Dakota is a form of elective insurance that employers can purchase to protect their employees. The purpose of workers’ compensation is to extend financial coverage for medical expenses, lost wages, and vocational rehabilitation for employees who are injured on the job.
An employee has more coverage than an independent contractor, who is considered self-employed. Therefore, independent contractors do not typically have any coverage under an employer’s workers’ compensation plan.
Misclassifying a worker as an independent contractor can have serious consequences, as there are laws in place that define an employee vs. an independent contractor in South Dakota. If you are treated like an employee but not afforded the same protections by your employer, then you have the right to take legal action and seek damages.
Alvine Law Firm will help you understand the coverage options for independent contractors, as well as what you can do if you are injured on the job but don’t qualify for workers’ compensation due to your employment status.
Employee vs. Independent Contractor: The Key Difference
An independent contractor in South Dakota must have their own established business and work primarily independently (Codified Law 61-1-11). This means that they maintain a higher degree of direction and control in their work compared to an employee, whose schedule, deadlines, obligations, and responsibilities are dictated by their employer.
The Employee Handbook by the South Dakota Department of Labor and Regulations highlights the difference between employees and independent contractors, stating that the latter must be engaged in their own business and free from direction and control.
These two elements are required for an individual to be classified as an independent contractor. If they are both not present, then that person is an employee and should have the appropriate rights and protections extended to them by the employer.
According to the United States Department of Labor, the economic labor test can determine if an employment relationship exists between a business and the person they hire. This test determines whether an employee is eligible for employee rights under the Fair Labor Standards Act (FLSA) or if they are considered an independent contractor.
The economic labor test examines factors such as:
- Opportunity for profit and loss depending on managerial skill
- Investment by the worker and employer
- The degree of control the worker has over their job
- The duration of the working relationship
- Whether the work is integral to the employer’s business
- Skill and initiative of the worker
It does not matter if your employer calls you an employee or not. If you fall under the classification, you deserve coverage under the FLSA and, possibly, workers’ compensation in South Dakota.
A qualified workers’ compensation attorney can help you determine your eligibility based on the factors discussed in this post.
Contact Alvine Law Firm in Sioux Falls, SD, to find out if you could be considered an employee. We always offer the first consultation with one of our attorneys free of charge.
Workers’ Compensation and Independent Contractors
Independent contractors are not eligible for workers’ compensation benefits in South Dakota. That coverage is reserved for employees of an employer that carries workers’ compensation insurance.
Because independent contractors are considered self-employed, a company that hires them for select services is not required to extend them employee protections. In the eyes of the law, an independent contractor is a personal business owner, and their relationship with companies they work for is really more between a business and client than an employer and employee.
If independent contractors are injured on the job, they could lose wages, accrue large medical bills, and face economic hardship due to their injury. In more severe cases, they could be disabled and unable to return to work.
Personal injury protections may be able to help an independent contractor recover expenses related to an injury sustained at the workplace. Unlike workers’ compensation, personal injury protection is universal.
Misclassified Workers
An employer who misclassifies an employee as an independent contractor can face legal consequences. These include paying late taxes, IRS audits, civil fines, criminal charges, such as fraud or embezzlement.
If you are an employee who feels you have been wrongfully denied coverage and employee benefits, speak with an attorney. They can help you review your rights and develop a sound legal plan to take action if necessary.
Options for Independent Contractors
If you are injured on the job but do not qualify for workers’ compensation, you still have options to recover damages.
- File a personal injury lawsuit against the company. You may be able to file a personal injury claim against the hiring entity or other responsible parties, especially if the injury took place on company property.
- Obtain private disability insurance. Independent contractors should consider purchasing their own disability insurance coverage to protect themselves in the event of an injury.
- Check for contractual provisions. Thoroughly review new contracts before signing for any indemnity or insurance clauses they may contain; you should not sign a contract that waives a hiring entity’s responsibility for any injuries you sustain on the job.
Seeking Legal Advice
When should you consult an attorney for workers’ compensation? As an independent contractor, you can consult with an attorney who can review the nature of your contract and determine whether you classify as an employee under South Dakota law.
If not, they can help you explore other options, such as filing a personal injury lawsuit.
Your attorney can navigate any legal processes you decide to undertake, appear in court on your behalf if necessary, manage legal documentation and paperwork, and represent you in negotiations.
Don’t delay taking action — while you have three years to file a personal injury claim in South Dakota, it is easier to recover maximum benefits when you act swiftly.
Conclusion
The team at Alvine Law Firm has successfully recovered millions of dollars in lawsuits for their clients. We have a dedicated staff that includes personal injury and workers’ compensation attorneys who can fight on your behalf.
Please call 605-275-0808 or contact us online to schedule your free consultation.
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