There are a lot of professionals in this field who will laugh at the notion that freelancers can be entitled to employee benefits. “Of course we’re not eligible for Workers Compensation! We’re independent contractors!” The idea does seem as preposterous and fanciful as a soul-devouring stenotype.
To give a brief overview, in New York, to avoid clogging the court system with employee accident cases, Workers Compensation coverage allows employees injured on the job to apply for benefits to cover their medical expenses and/or wages. To many, this would be where the discussion ends. If you’re not an employee, you can’t get benefits. But when we look into exactly what constitutes an employee, and the way this actually works, we find that the answer is more likely “it depends.” Administrative and judicial judges will look at several factors to determine whether someone is an “employee” or an “independent contractor” under the law, and how the “hiring entity” and the “hired entity” classify the relationship is not a major factor listed on their website.
- The right to control. Does the hiring entity or employer control the manner in which the work is done? In stenographic freelance circles, and particularly in New York, this can be a mixed bag. They might ask you to use a specific layout, arrive at a specific time, or even bring snacks to a depo. There are varying degrees of control, and if your agency is exercising a lot of control over you, you just might be an employee.
2. Character of work. If the primary work performed by the hiring entity is performed by the hired entity, that means the hired entity is an employee. Again, this is something you can probably argue both ways in stenographic circles. You can easily make the claim that court reporting agencies are in the business of providing court reporting services and therefore we should be employees. You can also make the argument that court reporting corporations are not in the business of court reporting, but rather acquiring court reporting professionals for lawyers. Just to note, US Legal tried that in an Unfair Competition case in California during the Holly Moose case. It argued that it was not a shorthand reporting corporation. Justice Elia rejected that, stating “such circular reasoning reasoning to evade…” [this state’s laws] “…is, at a minimum, unpersuasive.” Who can say what a judge in New York might say when applying the facts of a case to New York law?
3. Method of payment. The important bit here is that whether you receive a 1099 or W2 does not matter in determining an employee/employer relationship. Whether you receive regular payments or whether you are paid for a task as a whole is a deciding factor. Again, it can easily be argued either way dependent on the facts of a freelancer’s “employment,” are they taking jobs regularly and getting regular payments? Are they hired for a one-off assignment?
4. Furnishing equipment. The vast majority of us maintain our own equipment, and if a workers comp claim were ever made against an agency, I imagine the first thing they would do is bring out that fact. But there are other things to consider. Does the agency supply you with business cards or other materials that you’re supposed to hand out? Some do, some don’t, and that makes this a factor worth considering.
5. Right to hire/fire. This relates to the right to hire and fire who’s doing the work. For example, when an agency contracts you, a true independent contractor would have full authority to contract that out to someone else. In my time freelancing, I saw worksheets that forbade such behavior. Ultimately, the right to hire and fire is dominated by the agencies, and this makes a good case, on this factor, for reporters as employees.
6. Postmates Decision. Court reporters were doing the gig economy before it was popular. Now many states are grappling with how to treat these cases where someone may be called an independent contractor but meets all the definitions of a common law employee. In New York, we had the Postmates decision. That looked at several of these factors including the character of the work, right to control, and the method of payment. Another thing looked at was who controlled the customer and whether the independent contractor was able to go out and build his own customer base. This is something that court reporters are split on. Many of us have our own clients and many of us work exclusively through agencies. The Postmates decision gives us a look at how administrative judges and appellate courts might look at these kinds of issues in New York. If you don’t have any control or interaction with the client beyond the work you’re doing, a court could look at that and say “employee.”
Taking in all the factors above, as intelligent people not trained in law, we can see how we might argue it both ways. We can see that it’s very clear that the law doesn’t care much how the employer and employee classify the relationship. We can see what’s happened in this state and other states, and we can come to an interesting conclusion. Can freelancers claim Workers Comp benefits? It depends. Can the claimant show that they meet the definitions of a common law employee? I can’t answer that for you. But I can say that if you’re someone who’s injured on the job and meets these eligibility factors, it may just be worth consulting an attorney to give you real advice on your specific situation and the facts of your specific case. Independent contractors, on the other hand, generally may, but are not required to, purchase Workers Compensation insurance. This can be done to guard against medical bills or fulfill the terms of a contract.
Finally, as someone who briefly owned a corporation, I can tell agency owners to make sure you have a rider or option on your Workers Compensation insurance that covers you if an independent contractor claims they’re an employee. You don’t want to end up in a situation where you have a misclassified employee without coverage. It can constitute a crime to fail to follow our Workers Comp law. You can try searching other reporting firms and see what insurer they use. You can also engage with NYSIF to see if they offer a better rate than your current provider. Whatever you do, just be aware that this is a possibility, and the more your freelancers fit into those eligibility factors, the more this could end up a problem for you. I don’t want a problem for you. Chances are good an injured reporter doesn’t want a problem for you. But if somebody’s hurt, can’t work, and the medical bills are piling up, chances are good they’re going to take whatever avenue they’ve got to take to survive. The least we can do is keep this open for discussion.