The California workers’ compensation system requires employers to carry insurance that pays benefits to their employees who are injured on the job. But what if the employee is technically not an employee, but an independent contractor?
This is an issue that has troubled workers, companies, and courts for decades, and especially in recent years as more workers have earned their livelihoods through the so-called gig economy. Companies such as the ride-sharing service Uber argue that their drivers should be classified as independent contractors, not employees; therefore, the company is not required to carry workers’ compensation coverage or provide other benefits that are mandatory for most full-time employees.
Now, California looks likely to enact a new law that will reclassify many of these workers as employees. Despite fierce opposition from Uber and other companies, Assembly Bill 5 has already passed both houses of the state legislature. As of this writing, Gov. Gavin Newsom had not yet signed the measure into law, but he had expressed his support for it.
There are too many arguments for and against the new measure to detail them all in this blog post. It is sufficient to say that if Assembly Bill 5 becomes state law, it will have a significant impact on many businesses, particularly fast-growing ones such as app-based ride-sharing and delivery services. It will also have a profound effect on the people who work for these companies. If they are hurt on the job, they will be aware that they are entitled to workers’ compensation benefits.
However, even the most traditional employees often struggle to access all the benefits they need and deserve. It will be more important than ever for workers to seek out help from lawyers who have experience in workers’ compensation law.
Understanding Worker Classification in California
One of the most critical legal issues in California labor law is how a worker is classified. Employees are entitled to workers’ compensation, medical treatment, temporary disability benefits, permanent disability benefits, and vocational rehabilitation. Independent contractors, on the other hand, are excluded from these statutory protections and often face financial and medical hardship in the event of an injury.
California courts and legislators developed the ABC Test to determine classification. First applied in Dynamex Operations West, Inc. v. Superior Court (2018), the test places the burden on employers to prove that a worker is truly an independent contractor. Unless the employer can demonstrate all three prongs of the test — that the worker is free from control, performs work outside the company’s usual business, and has an independent trade — the worker must be treated as an employee.
This legal framework directly affects a worker’s ability to secure workers’ compensation benefits after a workplace injury.
The Role of AB 5 and Proposition 22
When Assembly Bill 5 (AB 5) was passed in 2019, it codified the ABC Test into state law, dramatically expanding employee classification for gig economy workers. This meant rideshare drivers, food delivery workers, and contractors in industries such as trucking, janitorial services, and healthcare were more likely to qualify for benefits.
However, the passage of Proposition 22 in 2020 created a carve-out for rideshare and delivery companies. Under Prop 22, companies such as Uber, Lyft, and DoorDash could continue to classify their drivers as independent contractors. Still, they were required to provide limited benefits such as occupational accident insurance and healthcare stipends. While this offered some protection, it fell short of full workers’ compensation coverage.
Court challenges followed, with the California Supreme Court upholding key provisions of Prop 22 in 2024. This means that the fight over classification is ongoing, and the rules remain complex and nuanced. Workers often require legal guidance to determine whether they are covered and what benefits they may be eligible for.
Can Independent Contractors Receive Workers’ Compensation?
Generally, independent contractors are excluded from workers’ compensation benefits in California. But the reality is not so simple. Misclassification is a widespread problem: workers who function as employees, under employer control and performing essential business tasks, are often labeled as contractors to save costs.
If a misclassified worker suffers an occupational injury or illness, they may still qualify for workers’ compensation by challenging their classification before the Workers’ Compensation Appeals Board (WCAB). This process is often contentious, with insurance carriers and employers resisting coverage. Legal assistance is usually necessary to gather evidence, present testimony, and prove eligibility under the ABC Test.
The Workers’ Compensation Filing Process
When a worker is injured, the steps to secure benefits depend heavily on classification:
- Report the injury to the employer immediately.
- File a claim form (DWC-1), which is processed by the employer’s insurance carrier.
- Medical evaluation by a physician approved under the California Division of Workers’ Compensation (DWC).
- Temporary disability benefits are available if the worker is unable to return to work while recovering.
- Permanent disability benefits if the injury causes lasting impairment.
- Appeal process through the WCAB if the claim is denied or the worker is told they are an independent contractor.
For contractors who are improperly denied benefits, the appeals process becomes the primary path to obtaining compensation.
Disputes and Employer Obligations
Employers in California are legally required by the Department of Industrial Relations (DIR) to carry workers’ compensation insurance for employees. Failure to do so can result in penalties, lawsuits, and liability for workplace injuries.
Common disputes include:
- Employers argue that a worker is an independent contractor despite evidence of control.
- Insurance companies are denying claims as “non-work-related.”
- Disputes over the type and duration of benefits, such as temporary vs. permanent disability.
These disputes underscore the importance of professional legal assistance, particularly in cases involving misclassification.
Impact Across Industries
While gig economy companies dominate headlines, the classification debate affects multiple industries:
- Trucking: Owner-operators are often faced with challenges as independent contractors.
- Construction: subcontractors and day laborers are frequently misclassified.
- Healthcare: traveling nurses and care providers are facing disputes over benefits.
- Janitorial and hospitality: service workers are often mislabeled to avoid benefits.
Workers in all of these fields may face significant challenges if their status is disputed and they are injured.
Why Legal Help Matters
Even when workers are correctly classified as employees, obtaining full benefits can be difficult. Delays, denials, and disputes over the extent of injuries are common. For gig workers and contractors, the obstacles are even greater due to legal gray areas and corporate resistance.
At Hussain & Gutierrez, we understand the complexities of California labor law and the challenges workers face when pursuing claims. Our attorneys represent both traditional employees and misclassified contractors, guiding them through claims, appeals, and litigation to secure the benefits they deserve.
Frequently Asked Questions
Can independent contractors get workers’ compensation in California?
Independent contractors are usually excluded, but misclassified workers may qualify under the ABC Test.
What benefits are available under workers’ compensation?
Covered employees may receive medical treatment, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits for surviving family members.
What role does Prop 22 play in workers’ comp eligibility?
Prop 22 requires companies like Uber and Lyft to provide limited occupational accident coverage, but it does not replace full workers’ compensation protections.
What should I do if my employer says I am an independent contractor, but I was injured on the job?
Contact a workers’ compensation attorney. Misclassification challenges are common, and legal assistance can help prove eligibility.
How long do I have to file a workers’ compensation claim?
In California, you generally have 30 days to report an injury and one year from the date of injury to file a claim, though deadlines can vary depending on circumstances.
Get Legal Help
If you were injured at work and are uncertain about your employment status, do not navigate the system alone. At Hussain & Gutierrez, our experienced California workers’ compensation attorneys can help you determine whether you are misclassified, guide you through the claims process, and fight for the full benefits you deserve.
Contact Hussain & Gutierrez today to schedule your consultation.
