Independent Contractors & Alabama Workers’ Compensation Law

Do Uber drivers and other independent contractors get workers’ compensation benefits?

Uber, the popular ride-sharing service, has taken some criticism in Alabama and across the U.S. because of their decision to classify Uber drivers as independent contractors as opposed to employees. As an effect, drivers are unable to receive benefits and do not have income taxes withheld from their paychecks. 

Classifying workers as independent contractors instead of employees can save a company quite a bit of money, but the harsh reality of the classification becomes apparent when an individual is injured on the job.

Play Video: Employee vs. Independent Contractor

Consequences of being classified as an independent contractor

If an Uber driver is injured while on the job, they are unable to receive workers’ compensation benefits. In effect, the driver could lose wages and would be forced to rely on personal health insurance to pay for medical expenses. 

Additionally, because the driver spends his time driving, the likelihood of him being involved in an auto accident and being injured is far greater than someone who does not drive for work.

Has Uber taken any steps to protect their drivers?

Uber has taken some steps to provide for their workers’ benefits, such as offering optional workers’ compensation packages funded by ride surcharges. This is far from the typical benefits employees receive, but it’s an attempted effort to provide some sort of peace of mind for drivers.

Generally speaking, workers’ compensation is required by law for traditional employees and must be paid by the employer itself. Independent contractors are not traditional employees by any means, however, and therefore are not required to receive benefits paid for by the employer.

Some employers misclassify employees as independent contractors to avoid paying taxes and workers’ compensation premiums. Uber specifically has taken on large expenses in litigating the ever-evolving issue. 

It’s important to understand the key differences between employees and independent contractors so you’re aware of your rights. If you believe you are improperly classified as an independent contractor, the IRS can inquire for you.

What’s the difference between an employee and an independent contractor?

Typically the IRS uses a “right to control” test as a way of distinguishing between employees and independent contractors. 

Generally, individuals are considered employees if a boss dictates how and when work is performed. 

Independent contractors, on the other hand, complete jobs in the manner in which they see fit and are typically able to set their own schedules. Accordingly, Uber drivers are normally classified as independent contractors rather than employees.

What can independent contractors do to protect themselves?

If you are properly classified as an independent contractor, take these steps to protect yourself in the event you’re ever injured on the job: 

• Start a savings account designed specifically as a safeguard. 
• Find a good insurance policy that will ensure your medical expenses are covered.
• Assess whether the risks are worth the reward in terms of your employment classification.

Overall, be mindful of the different classifications, as it can make a big difference if you become injured on the job.

Whose insurance pays after a rideshare accident?

Rideshare operators may also be able to obtain compensation via a personal injury claim if the other driver caused the car crash.

Proving fault in Alabama

In Alabama, proving fault means showing that the other party was negligent. To claim negligence, you will have to show that:

• The other party had a duty of care to you on the road.
• That duty of care was breached.
• The breach resulted in an injury.
• There were actual damages.

What is pure contributory negligence?

Alabama is one of only a few states that rely on pure contributory negligence to determine damages. 

Pure contributory negligence means that victims are precluded from recovering damages if they are deemed to be even remotely responsible for the accident. In other words, someone who is only 1% at fault will be treated by the courts exactly the same as an individual who was 99% at fault.

So under pure contributory negligence, if you were injured in an accident by an intoxicated driver, but it can be proven that you were speeding at the time the accident occurred, you wouldn’t be entitled to any compensation because you shared in the fault of the accident. 

That may seem unfair, but unfortunately, that is the reality here in Alabama. Even so, that doesn’t mean that accident victims are precluded from recovering damages. It does, however, mean that it’s more important than ever to talk with a personal injury attorney shortly after a traffic accident to ensure your rights are protected.

What compensation is available in Alabama car accidents?

Alabama courts may award damages in 1 of 3 categories: 

• Economic damages are meant to compensate victims for financial losses related to the accident, like lost wages, medical expenses and property damage. 
• Non-economic damages are meant to compensate victims for losses that are unrelated to financial loss, such as pain and suffering, loss of companionship and emotional trauma. 
• Punitive damages are normally reserved for instances where the other party intentionally inflicted harm. They are meant to punish the defendant and discourage others from similar behavior.

Steps to take after an Alabama car accident

Take the following steps immediately after an Alabama car accident. Doing so provides the best odds of obtaining maximum compensation through a personal injury lawsuit:

1. Stop your car and render aid if appropriate.
2. Contact 911 to summon the police, fire and ambulance services.
3. Take photographs and document the events surrounding the accident.
4. Gather contact information for witnesses, the other driver and/or passengers.
5. Never apologize or admit any fault to the other driver.
6. Seek medical treatment yourself, even if you believe you were not injured. Having an exam will ensure you all your injuries are documented, which is necessary for a successful personal injury claim.
7. Contact your insurance company and report the accident, regardless of whether or not you are also filing a personal injury claim.
8. Avoid posting anything about the vehicle accident on social media.
9. Contact an experienced personal injury attorney to ensure your rights are protected.