Workers’ Comp for Independent Contractors and Misclassified Workers

Yes. If you were labeled an “independent contractor” but California law treats you as an employee, you are entitled to workers’ compensation benefits for a work injury, no matter what your contract or your 1099 says. California presumes that anyone performing services for another is an employee (Labor Code section 3357), and the company has to prove otherwise under the strict “ABC test.”

The stakes are high. A misclassified worker who is told “you’re a contractor, you’re not covered” may go without medical care and without the temporary disability checks that replace two-thirds of lost wages. On an average weekly wage of $900, that is $600 a week, and serious injuries can keep people off work for months. Even if the company never bought workers’ comp insurance, California has a fund that can pay benefits.

This guide explains how your status is decided, the exceptions, what happens when the company is uninsured, common real-world situations, the defenses companies raise, and the steps to take now.

How California decides if you are an employee

For workers’ comp, two rules work together. First, Labor Code section 3351 defines “employee” broadly and now expressly includes anyone who is an employee under the ABC test in Labor Code section 2775. Second, Labor Code section 3357 presumes that a person rendering services for another is an employee unless they are an independent contractor or specifically excluded.

Under the ABC test, which the California Supreme Court adopted in Dynamex Operations West, Inc. v. Superior Court (2018) and the Legislature codified in Labor Code sections 2775 through 2787, you are an employee unless the hiring company proves all three of these:

• A: You are free from the company’s control and direction in doing the work, both under your contract and in fact.
• B: The work you do is outside the usual course of the company’s business.
• C: You are customarily engaged in an independently established trade, occupation or business of the same kind.

Prong B is where many companies fail. A flooring company that pays installers on a 1099 is in the business of installing floors; the installers are doing the company’s core work. For a deeper look at each prong, see our guide to independent contractor misclassification and the ABC test.

Once you are treated as an employee, you are entitled to the same benefits as any other injured worker: all reasonably necessary medical treatment, temporary disability payments while you cannot work, permanent disability benefits if you are left with lasting limitations, a supplemental job displacement voucher in qualifying cases, and death benefits for dependents. The company’s label does not reduce any of them.

Key fact

Exceptions: when the older Borello test applies

Labor Code sections 2776 through 2784 exempt certain occupations and business relationships from the ABC test, such as some licensed professionals, certain business-to-business arrangements, referral agencies, and construction subcontractors that meet specific conditions. When an exemption applies, status is decided under the multi-factor test from S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989).

Fittingly, Borello was itself a workers’ comp case. The California Supreme Court held that agricultural “sharefarmers” who harvested cucumbers under written contractor agreements were employees entitled to coverage. The main question under Borello is who has the right to control the manner and means of the work, along with factors such as who supplies the tools, whether the work is part of the company’s regular business, how you are paid, and whether you can make a profit or loss.

Exemptions come with detailed requirements, and the company claiming one has to prove it fits. Many do not. Even under Borello, plenty of workers labeled contractors turn out to be employees.

Watch: injured at work in California

Our attorneys explain what your employer must do after a work injury, and what to do in the first 24 hours to protect your claim.

Common situations and how the rules apply

Situation	Likely result	Key rule
Installer, laborer or technician paid on a 1099 doing the company’s core work	Usually an employee; workers’ comp applies	Labor Code 2775 (prong B)
Worker hired by an unlicensed contractor on a job that requires a license	The unlicensed contractor’s workers may be treated as employees of the licensed contractor or other hiring party	Labor Code 2750.5
Housekeeper, nanny or gardener hired directly by a homeowner	Covered if you worked at least 52 hours and earned at least $100 in the 90 days before the injury	Labor Code 3352
App-based rideshare or delivery driver	Generally treated as a contractor under Proposition 22, but the company must carry occupational accident insurance	Bus. & Prof. Code 7451, 7455
Licensed professional in an exempt occupation	Status decided under the Borello factors	Labor Code 2783

Your facts matter more than any label. Two workers with the same job title can come out differently depending on who controlled the work and how the business operates.

If the company has no workers’ comp insurance

Every California employer must carry workers’ comp insurance or be approved to self-insure (Labor Code section 3700). Companies that misclassify workers often skip coverage. That does not leave you without options:

• The Uninsured Employers Benefits Trust Fund (UEBTF). When an illegally uninsured employer fails to pay a workers’ comp award, the UEBTF, run by the state, can pay benefits under Labor Code section 3716. There are specific procedural steps to bring the fund into the case, and it pursues the employer for reimbursement.
• A civil lawsuit. Labor Code section 3706 lets an injured employee of an uninsured employer sue in civil court for damages. Under section 3708, the employer is presumed negligent and cannot rely on certain defenses, such as your own carelessness.
• Penalties against the employer. The state can issue stop orders and penalties against uninsured employers, which often brings them to the table.

Uninsured cases are procedurally demanding. Missing a service or filing step can delay benefits for months, so this is where an experienced attorney makes the biggest difference.

💡 Example: Carlos installs flooring for a company that pays him on a 1099. He breaks his wrist on a job site and is told he isn’t covered. Because installing floors is the company’s regular business, he likely passes prong B and is an employee. His average weekly wage is $900, so his temporary disability rate is two-thirds of that: $600 a week. If the company turns out to be uninsured, his attorney can bring the UEBTF into the case.

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Defenses companies raise, and why they often fail

• “You signed a contractor agreement.” A contract label is not controlling. Courts look at the actual relationship.
• “You had your own business license or LLC.” Helpful to the company on prong C, but it still has to prove prongs A and B.
• “You set your own hours.” Flexibility alone does not prove freedom from control over how the work is done.
• “You used your own tools.” One factor among many, and rarely decisive.
• “You weren’t working when you got hurt.” This is a separate question about whether the injury arose out of and in the course of employment, and it has its own rules and exceptions.

Remember the burden: under the ABC test, the company must prove all three prongs. If it cannot, you are an employee.

By the numbersOne year

Deadlines you cannot miss

Report your injury to the company in writing as soon as possible, and within 30 days (Labor Code section 5400). Ask for a DWC-1 claim form; if they refuse because you are “just a contractor,” your attorney can file the claim directly. In most cases, you have one year from the date of injury to file an Application for Adjudication of Claim with the Workers’ Compensation Appeals Board (Labor Code section 5405). Civil claims against uninsured employers and wage claims have their own, different deadlines.

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What to do now, step by step

1. Get medical care and tell every provider the injury happened at work.
2. Report the injury in writing to the person who assigns your work, and keep a copy.
3. Gather proof of the relationship: texts and emails giving instructions, schedules, uniforms or badges, pay records, 1099s, and any contract.
4. Write down who controls your work: who sets your routes, hours, prices and methods, and who can fire you.
5. Identify the business: its legal name, address and any contractor license number.
6. Don’t sign a release or “settlement” offered directly by the company without legal advice.
7. Talk to a workers’ comp attorney about filing the claim and, if needed, bringing in the UEBTF.

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Misclassification is often the tip of the iceberg

If you were misclassified, you probably were not paid overtime, did not get meal and rest breaks, paid your own work expenses, and did not receive accurate wage statements. Those are separate wage-and-hour claims, and willful misclassification carries civil penalties under Labor Code section 226.8. Learn more on our wage and hour violations page.

If you were let go after reporting an injury, you may also have retaliation claims. And if the insurer that does exist is fighting coverage, see our guide on a denied workers’ comp claim.

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Frequently asked questions

Can a 1099 worker get workers’ comp in California?

Yes, if the law treats them as an employee. A 1099 is a tax form, not a legal ruling. Many 1099 workers are employees under the ABC test.

Who decides if I’m an employee for workers’ comp?

If the insurer or company disputes it, a workers’ compensation judge at the WCAB decides, based on the evidence about your working relationship.

What if the company says it has no insurance?

You can still pursue benefits. The Uninsured Employers Benefits Trust Fund can pay a workers’ comp award the employer fails to pay, and you may also be able to sue the employer in civil court.

Do rideshare and delivery drivers get workers’ comp?

Under Proposition 22, app-based drivers are generally treated as contractors, but the companies must provide occupational accident insurance for on-the-job injuries. Coverage details vary, so have a lawyer review your situation.

Will filing a claim affect my immigration situation?

California workers’ comp benefits are available to injured workers regardless of immigration status.

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