Employers Criticized for Misclassifying Independent Contractors to Avoid Workers Comp Premiums, Taxes

Under traditional employment terms, employers pay for workers comp insurance coverage for their employees. However, with independent contractor status, the employee is not a direct employee of the company they receive paychecks from, which means the employer does not have to cover federally-regulated employee benefits like workers comp.

Recently, numerous businesses, from construction companies to hospitals to strip clubs, have faced heavy criticism and even government crackdowns because they intentionally misclassify employees as independent contractors to avoid paying workers comp premiums and other employee safety regulations. Independent contractors are defined, legally, by how much “control” a company has over a worker through telling the employee what to do, and supplying equipment the worker needs to do their job.

In South Carolina, for example, plaintiff Mildred Shatto was originally denied workers comp for a fall-related injury sustained at her place of employment, McLeod Regional Medical Center – simply because the anesthetist was classified as an independent contractor.

The fall was so bad that Shatto bruised one of her eyes, injured both arms and one shoulder, and damaged her spinal cord, leading to the development of paralysis on one side. The severity of her injuries meant that she could not take a handful of sick days off work to recover, and instead had to undergo physical therapy, prescription medication, and numerous doctors’ visits. During that time, she was unable to work.

Although the SC Supreme Court ruled last December that Shatto should receive workers comp, a decision upheld this past June by the SC Court of Appeals, her ruling does not solve the overall problem in the US for independent contractors.

Fortunately, the Obama Administration has pledged to help the problem of independent contractor misclassification. On September 15th, Labor Secretary Thomas Perez announced the federal government would give funding to 19 states to help continue efforts to crack down on such workers comp fraud. This past spring, Congress passed the Consolidated Appropriations Act of 2014, which authorized grand funding of at least $10 million for “activities to address the misclassification of workers.”

Unfortunately, South Carolina is not one of the states that has received that federal funding. This means that individual workers must continue to dispute denied workers comp claims or their terms of employment if they believe they are being exploited.

The Strom Law Firm Can Help with Workers Comp Claims in South Carolina

Any full-time employee (working for an employer with four or more employees) who has an employment related injury and needs medical attention should be covered under workers’ compensation insurance. It doesn’t matter if the injury was a complete accident or the fault of a co-worker.

The workers comp lawyers at The Strom Law Firm, LLC proudly seek justice on behalf of employees injured or killed on the job who work for private companies, as well as employees working for local county, city, and state government. We are licensed to practice throughout South Carolina, as well as Georgia and New York. If you have been injured on the job, give us a call. We offer a free consultation to discuss the facts of your case.803.252.4800.