In recent years, a new kind of economy has been evolving below the radar. Experts commonly refer to it as the “gig” economy. By definition, the gig economy is the network of temporary work positions existing in the free market system. Examples of gig economy employees can include independent contractors, freelancers, those employed on a project basis, temporary and/or part-time hires.
While making a living within a gig economy can certainly pay the bills, it often leaves those working for these types of companies missing out on the benefits that come with a traditional wage job.
Take access to workers’ compensation, for example.
Recently, the number of food delivery employees (referred to in the article as delivery riders) killed in Australia has increased. Just in the past 2 months, 5 delivery riders have been killed while on the job. This has led to a debate on what rights gig employees should be eligible for in that country.
On September 29, Xiaojun Chen, a delivery rider for Hungry Panda was hit by a bus while delivering food in Sydney and was killed. His widow, Lihong Wei, inquired with Hungry Panda about compensation for her loss and was told that they considered her husband an independent contractor rather than an employee. This made him ineligible for compensation.
Mr. Chen, his family’s sole source of income, was in the country on a temporary visa.
Sadly, deaths among gig economy workers like Mr. Chen (and the other 4 victims) happen much closer to home.
Arizona workers’ compensation laws
Arizona workers’ compensation benefits are available for most employees who suffer injuries while on the job. By law, in exchange for workers’ comp benefits, an employee forfeits the right to sue his/her employer in the event they’re injured.
Independent contractors, however, generally aren’t covered by workers’ compensation. In order for an independent contractor to receive compensation from their employer after a work-related injury, they must sue and prove that their employer was negligent.
Like most states, most Arizona businesses are required to have workers’ comp insurance if they regularly hire employees. These protections are available to both full- and part-time employees. But for now, independent contractors, occasional workers and domestic workers who only work at home are not included in these protections.
Workers who are injured on the job and are covered have 1 year from the date of their injury in which to file a workers’ compensation claim. Furthermore, the injured worker is responsible for immediately notifying their employer of their injury and seeking medical attention.
After the employer’s insurance carrier has received their claim, they have 21 days to either accept or deny the claim. In the event of a claim denial, the injured worker has 90 days to request a hearing to appeal.
Are gig workers eligible for workers’ compensation?
In the 2020 election, Uber and Lyft (2 of the nation’s biggest gig worker employers) spent over a quarter billion dollars in California to fight the classification of gig economy contractors as employees. With the passing of Proposition 22, the ride sharing companies won the right to continue classifying their drivers as independent contractors and therefore avoid the workers’ compensation requirement.
As for Arizona, in 2016, H.B. 2114 was adopted. H.B. 2114 states that by signing a ‘declaration’ form, workers assume the presumption of being an independent contractor. The employee’s signature acknowledges that they are an independent contractor and therefore:
- Ineligible for employee benefits, workers’ compensation, and unemployment
- Has the right to work for other businesses
- Responsible for supplying their own tools and acquire any required licenses
- Not eligible for expense reimbursement (unless expressly agreed upon)
- Assumes the responsibility for reporting and paying income taxes
- Determines their own work schedule
Independent contractor statistics
The U.S. Bureau of Labor Statistics reports that independent contractors make up the largest contingent of employed workers in the nation. This number equates to around 15.5 million workers—or put differently, 1 out of every 10 Americans working is an independent contractor. Some experts say this number is low and could be as much as 20% of the workforce.
Those working as gig economy contractors are often purposefully overlooked for benefits, or even hired specifically to avoid paying out benefits, in order to reduce company costs. Independent contractors, freelancers and subcontractors are generally not eligible for benefits, including workers’ compensation.
This means that a large portion of the workforce is now responsible for paying for their own workplace injuries.
There are also cases where employers misclassify their employees. For this reason, you need to be an advocate for your own benefits in the event that you’re injured while on the job. This is where the assistance of an experienced workers’ compensation attorney can be beneficial. If you’re able to prove that you are an employee to your company and were misclassified as an independent contractor, you could still be entitled to benefits—regardless of how your employer classifies you.
As you can see from these situations, workers’ compensation can be confusing—and that’s when a case is simple. If you’ve been injured while working, you need to be focused on your recovery so that you can get back to work.