Are Construction Workers Entitled to Workers’ Compensation?

 Posted on July 08, 2024 in Workers' Compensation

Wages and benefits resulting from a job are meant to provide workers with economic stability and insurance coverage in the event of a workplace accident. Every state except Texas mandates that employers must carry workers’ compensation insurance. Yet many employers try to circumvent these rules by misclassifying employees as independent contractors.

This misclassification deprives workers of core rights and protections while shifting costs and risks to workers who may barely be getting by financially. It is estimated that between 10 and 30 percent of all employees are misclassified as independent contractors.

Construction workers are often misclassified as independent contractors, even though they meet virtually none of the requirements. Following a workplace accident on a construction site, a construction worker may be told they are not covered by workers’ compensation.

Before taking such a statement at face value, it is important to speak to an experienced Morgan Hill workers’ compensation attorney who can help determine what steps need to be taken next. Misclassification as an independent contractor may be the first issue to be dealt with. It is beneficial to have a skilled attorney who can help with these complex issues.      

Are All Construction Workers Covered Under California Workers’ Compensation?

Under California law, construction industry employers must carry workers’ compensation insurance even if they have only one employee. Since the construction industry is considered one of the most dangerous industries in terms of accidents and deaths on the job, this is an important distinction. California contractors with an active license must provide proof of valid workers’ compensation insurance.

The only exemption for a contractor in the state is a signed waiver exemption that certifies the contractor has no employees. All active contractors, including concrete contractors, air, heating, ventilating, and air-conditioning contractors, roofing contractors, tree service contractors, and asbestos abatement contractors, must carry workers’ comp or have a valid certification of self-insurance even if they have no employees.

What Differentiates a Construction Employee from an Independent Contractor?

There are specific differences between employee status and designation as an independent contractor. Construction employees:

• Work for another person’s business at an hourly rate
• Use the tools, equipment, and materials belonging to the company
• Perform work assigned by the employer
• Work when and where the employer tells them to, with the same employer

Independent contractors who work in the construction industry:

• Work for themselves and decide what projects to take
• Have a temporary relationship with the employer and may work for multiple clients
• Decide when and where they will work with their own tools, materials, and equipment

How Does Misclassification in the Construction Industry Harm Workers?

From 1.1 to 2.1 million construction workers are misclassified across the United States. When construction workers are misclassified as independent contractors rather than employees, they are deprived of workers’ compensation benefits in the event of a workplace accident. They are also being deprived of contributions to Social Security and Medicare, overtime pay, unemployment benefits, protection from discrimination, and collective bargaining rights.   

How Does Misclassification of Employees Benefit Construction Employers?

Many low-income workers, workers of color, and immigrant workers are already struggling to survive. When these workers are misclassified as independent contractors while working in one of the most dangerous industries, they are left to fend for themselves in the event of a workplace accident.

There are obvious benefits for employers, as they can save as much as 30 percent of payroll and related taxes they would pay for regular employees. Employers may pay misclassified employees off the books, so there is no evidence they work for the company.

Even though the misclassification of employees is known as payroll fraud—and is a crime—misclassified workers are often afraid to mention their status to anyone, particularly when they are not legal residents.  

Call a Santa Clara County, CA Workers’ Compensation Attorney for Assistance

At Cramer + Martinez, we have served clients who need assistance with workers’ compensation in Gilroy and the surrounding areas for almost three decades. With more than two decades of combined experience in workers’ compensation law, our Hollister, CA workers’ compensation attorneys are ready to answer your questions and help you get the benefits you need. Call Cramer + Martinez at 408-848-1113 to schedule a free consultation.