The bad news is that there is a good chance that you will get hurt at work sometime in your lifetime. In 2011 alone, there were over 134,000 work injuries reported to the Georgia State Board of Workers’ Compensation. The good news is that many of the things you can do to be prepared for or hopefully prevent a work injury that will cost you little or nothing. This series of articles will focus on “Helpful Hints” to make sure that you are protected in the event that you are injured at work.
Being prepared is important. Like the ant who stores food for winter in the “Ant and the Grasshopper” story, we do better when we prepare for what the future will bring. As a workers’ compensation attorney, the thing I hate telling people the most when they call me is that I cannot help them because they already made choices that did not protect their rights. Unfortunately, sometimes I am not able to help people who have been injured at work because of some choice they made. Many times these choices were made when they were hired for a job. Sometimes, people simply waited too long before filing a claim.
How does being an independent contractor affect my workers’ compensation rights?
One of the reasons that I am not able to help people get medical treatment or other benefits when they are injured at work is that they actually are working as independent contractors. The Georgia Workers’ Compensation Law usually only covers you if you are an employee. There are some exceptions to this general rule so you should still talk to an attorney even if you are injured as an independent contractor. However, you are much more likely to be covered under Georgia law if you are an employee.
So, if you agree to accept work as an independent contractor, then you will likely find that you are not covered by workers’ compensation even if you are injured on the job. Without workers’ compensation insurance to pay for medical bills or wage loss, the effects of a job injury to an independent contractor can be devastating.
Many employers like to hire people as “independent contractors” or “contract labor”. They will often send someone a Form 1099 instead of a W2. If your employer is not holding out taxes on your income and you are sent a 1099 at the end of the year, then there is a good chance that you are being treated as an independent contractor. In addition to the loss of workers’ compensation coverage, being an independent contractor could also mean higher taxes and other potential disadvantages. Because of this, you may want to discuss the potential consequences of this choice with a CPA or tax professional as well.
I know the devastating effects that severe work injuries can have on individuals and their families. These effects are even more devastating if a person is not covered by workers’ compensation. Before agreeing to accept work as an independent contractor, please consider the consequences of this decision. You do not want to get injured at work in Georgia and then find out you do not have workers’ compensation coverage.
Does it matter if I incorporate?
Recently, an attorney in our firm spoke to a person about an injury on the job in Georgia. The person who was injured had owned his own business for years. The person had done the right thing and purchased workers’ compensation coverage. However, a couple of years before the injury at work, the individual had dissolved the company and was operating his business as a sole proprietor.
The reason this matters is because a sole proprietor is usually an employer, not an employee. Georgia workers’ compensation law usually only provided benefits for “employees” who are injured on the job. As a result, this person who suffered a clear work-related injury was not covered because, as a sole proprietor, he was an employer and not an employee.
In the same situation above, if the business had been incorporated and not dissolved, there would very likely have been coverage since corporate officers are considered employees as long as they do not choose to exempt themselves from workers’ compensation coverage. So, if you work as a sole proprietor, one of the ways that you can prepare for a work injury is to consider incorporating your business. There are certainly be other advantages or disadvantages to incorporating a business other than coverage under the Georgia Workers’ Compensation law. You should probably talk to an attorney who specializes in small business matters to consider all possible advantages and disadvantages before making such a decision.
It is also important to know that there are ways that an unincorporated sole proprietor can choose to be covered under Georgia workers’ compensation insurance but it requires jumping through a few legal hoops and must be done before a work injury ever occurs. Specifically, O.C.G.A. §34-9-2.2 currently provides, “Any sole proprietor or partner of a business whose employees are eligible for benefits under this chapter may elect to be included as an employee under the workers’ compensation insurance coverage of such business if he is actively engaged in the operation of the business and if the insurer is notified of his election to be so included.” However, before trying to elect coverage under this section, it is important to know that there are requirements for how the forms must be completed and filed; so it would be best to discuss this option, as well as the option of incorporating the business, with a Georgia attorney.