Recovering Lost Earnings After an Accident if You Are Self-Employed

Recovering Lost Earnings After an Accident if You Are Self-Employed

When people think of workers compensation claims, it’s often in the context of an employee being injured during their employment. But what if you’re self-employed and engaged as a subcontractor and you hurt yourself while doing your job?

Employee versus independent contractor

The difference between an employee and independent contractor is based on many different factors. The most crucial point of difference is that an employee is someone who provides labour to an employer, and can be considered a part of the employer’s business. Contractors, on the other hand, provide a service that is sold independently, so they are effectively running their own business and are self-employed.

The Independent Contractors Act 2006 (IC Act) and the Fair Work Act 2009 (FW Act) protects the rights and entitlements of independent contractors.

A ‘worker’ is someone who carries out work under a contract of service (whether as an employee or not) and where a working relationship exists, with one party being the employer and the other party as the worker.

Sub-contractors are self-employed and therefore cannot be considered a ‘worker’ under the Act. The court will look at each case and decide after examining the relationship between the two parties in its entirety when determining the status of a person’s employment.

Despite being labelled as a sub-contractor, you are likely to be a ‘worker’ if:

  • you are given detailed directions, and your work is supervised
  • you either work exclusively for the employer or are intended to be working for that employer (as opposed to someone who is free to carry out work, particularly of the same kind, for others)
  • you are required to work regular hours and are paid wages periodically rather than per job
  • the employer provides you with the equipment, tools and materials needed for the job
  • you have little or no power to negotiate the terms of the contract.

How is the loss of income determined?

The process can be slightly more complicated for contractors and self-employed people who wish to recover their loss of earnings after a personal injury. While there may be tax advantages to being self-employed, they’re usually at a disadvantage when it comes to claims for loss of income after an accident, with no clear and complete earnings history.

As a handy guide, the following documentation will support your claim:

  • Your Accounts and Tax Returns for the three years before the accident
  • Details of any colleagues who can verify the income you would have received if you had been available for work.
  • All invoices and receipts for the last year leading up to the accident.

Essentially, the more paperwork you can provide to support your claim and prove you have suffered a loss of earnings, the better the chance of recovering those losses.

Whether or not you are a worker and a contract of service exists, will depend on the facts of each case.  If you do not meet the definition of ‘worker’ within the legislation and the law, you may still be entitled to bring a damages claim if there is negligence on the part of another person resulting in you being injured. These types of claims have strict time limits.

Taylor & Scott compensation lawyers are experts in personal injury claims and speaking to them about your case will help you understand your entitlements. This particular area of the  law is complex, and it pays to get the best legal advice upfront for peace of mind.

Our specialist lawyers will do everything they can to ensure you receive maximum compensation for the injuries you have suffered and will act for you on a no-win/no-pay basis, meaning you don’t pay Taylor & Scott any costs whatsoever unless and until you win your case.

Need help with a claim? Arrange an appointment using our online contact form or call 1800 600 664.

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