Employees vs. Independent Contractors and Workers’ Compensation Benefits

August 2014

Because Iowa law does not require employers to provide workers’ compensation benefits to independent contractors, it is very important for workers to know whether they qualify as an employee or an independent contractor. It’s also critical for workers to recognize that some employers misclassify their workers – whether intentional or not – which can unfairly deprive a worker of benefits.

Because the line between workers and independent contractors can sometimes be blurry, it is not always easy to determine when a worker has been improperly classified. Fortunately, the Iowa Supreme Court has created a test to help employers and workers alike determine whether a worker is an employee or an independent contractor.

Mallinger v. Webster City Oil Co.

One of the most frequently cited cases for determining the difference between an employee and an independent contractor is Mallinger v. Webster City Oil Co. In Mallinger, the Iowa Supreme Court set forth an eight-part test for determining the nature of the worker-employer relationship, with no single factor carrying more weight than any other. These factors are as follows:

  • Whether the worker has a contract to perform a job or specific work at a fixed price
  • The independent nature of the worker’s business
  • Whether the worker employs assistants and has the right to supervise their activities
  • Whether the worker must supply his own tools, supplies, and materials
  • The worker’s right to control the progress of his work, except for the final result
  • The duration of the job
  • How the worker is paid (for example: by the hour or by project)
  • Whether the work is part of the employer’s regular business

In general, courts look at these factors as a whole to determine whether a worker is an employee or an independent contractor. Iowa courts also frequently consider whether the employer has a right to control how the worker accomplishes his work. In Schlotter v. Leudt, for example, the Iowa Supreme Court stated: “The most important consideration in determining whether a person giving service is an employee or an independent contractor is the right to control the physical conduct of the person giving service. If the right to control, the right to determine, the mode and manner of accomplishing a particular result is vested in the person giving service he is an independent contractor, if it is vested in the employer, such person is an employee.”

Iowa Workers’ Compensation Law

Contact Attorney Ed Keane today at (712) 234-3088 to discuss your workers’ compensation case.

This website has been prepared by Keane Law Firm for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.