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Workers’ Compensation Limited in the Gig Economy

Posted on in Workers' Compensation

Workers’ Compensation Limited in the Gig EconomyAdvances in digital technologies have caused a growth in the gig economy – a job market based on freelance work and short-term contracts. Uber, Airbnb, and Postmates are three examples of gig economy employers who are driven by apps and digital platforms. Employees like the gig economy because it gives them flexibility in when and where they work. Employers benefit from decreased personnel costs because most of their employees are independent contractors. One of the disadvantages of being an independent contractor is that you lack employee benefits, such as workers’ compensation insurance. If the gig economy becomes a larger portion of the workforce, states such as Illinois may consider adjusting their employment laws.

Independent Contractor Rights

Illinois requires employers to carry workers’ compensation insurance in case one of their employees is injured at work. Independent contractors do not qualify for workers’ compensation benefits under Illinois law. However, the Illinois Workers’ Compensation Commission has awarded benefits to independent contractors when it determined the employer treated the contractor as an employee. Examples of evidence include:

  • The contractor works fulltime and exclusively for the employer;
  • The employer determines the contractor’s schedule and work assignments;
  • The employer owns the equipment that the contractor uses;
  • The employer pays for expenses related to the work; or
  • The contractor must pass a drug test before they can start working.


The lack of workers’ compensation benefits for independent contractors will become a larger problem if more workers rely on jobs from the gig economy as their sole income. Even for those who use the gig economy to supplement their main income, there is a concern that they will not receive benefits if injured while doing their independent contract work. State legislative action may be the only way to provide workers’ compensation benefits to gig economy employees. For instance, California recently passed a law that will classify independent contractors for gig economy companies as employees. The law states that a worker is an employee if:

  • The employer controls how the worker performs tasks; or
  • The worker’s duties are part of the employer's normal business.

Gig economy companies, such as Uber and Lyft, are fighting the legislation with lawsuits and by claiming that they are technology companies and not ride service companies.

Contact a Crystal Lake Workers’ Compensation Attorney

Work-related injuries can easily occur if you have a gig economy job. For instance, rideshare drivers could be hurt in a vehicle accident. A McHenry County workers’ compensation lawyer at Botto Gilbert Lancaster, PC, can determine whether your employer should provide you with workers’ compensation benefits based on your circumstances. To schedule a free consultation, call 815-338-3838.



Illinois State Bar Association State Bar of Wisconsin Crystal Lake Chamber of Commerce Illinois Trial Lawyers Association McHenry County Bar Association
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