Illinois Workers’ Compensation Explained
Chapter 3 – Employer/Employee Relationship
This chapter discusses the requirement that there be an actual employer and employee relationship between the injured worker and the person or company for whom they are working. The most common question in this area involves whether the worker was really an independent contractor rather than an employee. Other issues that can arise on this topic have to do with workers who are loaned from one employer to work for someone else, and who may be responsible to pay workers’ compensation benefits when they are injured.
To be covered under the Act, there must be an employer and employee relationship. The injured employee must be a true “employee.” Not everyone that receives money for performing a service or task for someone else is an employee. The relationship may be that of an Independent Contractor. Independent Contractors are not covered unless they have purchased their own insurance.
1. Who is an Independent Contractor?
Generally, an Independent Contractor is someone who is hired to do a job and is left to do that job without direction, control or interference by the one that hired them. Taxes are not withheld from their payment, tools and materials are provided by the contractor. Generally, these are higher skilled jobs.
Just calling someone an Independent Contract does not make it so. If the person doing the hiring wants to control how and when a particular job is performed, it is much more likely the relationship is an employer-employee than an independent contractor. As was noted by the Illinois Supreme Court:
“No single facet of the relationship between the parties is determinative, but many factors, such as the right to control the manner in which the work is done, the method of payment, the right to discharge, the skill required in the work to be done, and the furnishing of tools, materials or equipment have evidentiary value and must be considered. Henn v. Industrial Commission, 3 Ill.2d 325, 121 N.E.2d 492. Of these factors, the right to control the work is perhaps the most important single factor in determining the relationship Crepps v. Industrial Commission, 402 Ill. 606, 85 N.E.2d 5, inasmuch as an employee is at all times subject to the control and the supervision of his employer, whereas an independent contractor presents the will of the owner only as to the result, and not as to the means by which it was accomplished. Immaculate Conceptions Church v. Industrial Commission, 395 Ill. 615, 71 N.E.2d 70.”
It is possible for an Independent Contractor to purchase workers’ compensation insurance coverage for themselves, in which case this would be no different than any business owner electing to provide coverage for themselves.
2. Complicated Work Relationships
There are a lot of other complicated work relationships that that may or may not provide coverage for work accidents. In particular, if a person working for an uninsured subcontractor is injured, a general contractor may become liable to pay workers’ compensation benefits. So too, when an employee is loaned out to another employer, such as with a temporary employment agency, there are provisions in the law that allow either the loaning or the borrowing employer to be held responsible for payment of workers’ compensation benefits.
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