FAQ – INDEPENDENT CONTRACTORS

The Workers’ Compensation Board (the “Board”) created this frequently asked questions page to answer some of the most common questions we receive and to give basic information about who is an employee and who is an independent contractor for purposes of the Workers’ Compensation Act.

These frequently asked questions do not apply to wood harvesters.

How do I know if I am considered an employee?
Every person who works for pay or some other form of compensation is presumed to be an employee unless the employing unit proves the person is not their employee.

How does an employer prove a person is an independent contractor and not their employee?
The short answer is that the employing unit must prove the person is free from the essential direction and control of the employer.  The long answer is that the Workers’ Compensation Act has factors that are used to determine if someone is an independent contractor.  These can be found below.

Can a worker and an employer agree the worker is an independent contractor?
No.  The only way a worker will be considered an independent contractor is if they meet the factors below.

I received IRS Form 1099 from my employer.  Does that prove that I am an independent contractor?
No.  The only way a worker will be considered an independent contractor is if they meet the factors below.

Who determines whether a worker is an independent contractor?
An administrative law judge at the Workers’ Compensation Board.  If a person is injured and there is a question about whether the injured person is an employee or an independent contractor, the case will be litigated.  One issue the administrative law judge will decide is whether the injured person is an employee or independent contractor.  The decision will depend on the facts as they exist when the injury occurred.  The administrative law judge will consider the factors discussed below.

Is there a way for me to show that I believe I perform work as an independent contractor?
Yes.  Starting October 25, 2023, you can file an Independent Contactor Statement with the Board.

Do I have to file an Independent Contractor Statement if I think I am an independent contractor?
No.  The Workers’ Compensation Act permits, but does not require, the filing of a statement.

What does the Independent Contactor Statement mean?
The Independent Contactor Statement means that you believe you meet the independent contractor factors and are therefore presumed to be an independent contractor and not an employee.

Does an Independent Contractor Statement apply for any work I perform?
Generally, yes; the independent contractor statement process does not apply to wood harvesters.  Also, the actual performance of the work must be consistent with the independent contractor factors or the legal presumption of independent contractor status will be lost.

Is the Independent Contractor Statement binding?
No.  An Independent Contractor Statement creates a presumption that the person is an independent contractor.  This presumption is rebuttable.  If the independent contractor’s relationship with the employer turns into an employee-employer relationship, then the independent contractor status will be lost and the employing unit may be liable for workers’ compensation benefits.

If I file an Independent Contractor Statement, am I prohibited from filing a claim for workers’ compensation benefits if I am injured?
No.  You can file a claim, but you will have the burden of proving that you were an employee rather than independent contractor.

How do I file an Independent Contractor Statement?

How can I find out if an individual has filed an Independent Contractor Statement?
Information regarding who has filed a statement will be available on the Board’s public website (www.maine.gov/wcb/Departments/coverage/independentcontractor.html) and updated weekly.

If I file an Independent Contractor Statement, when will it be effective?
Statements are effective when they are received by the Board.  The effective date will be available on the Board’s website.

Can I request an effective date that is prior to the date I file the Independent Contractor Statement?
No.  Statements are only effective from the date they are received by the Board.

How long is an Independent Contractor Statement valid?
Independent Contractor Statements are valid for one year from the date they are received by the Board.

What happens at the end of the year?
If you plan to continue working as an independent contractor then you must submit a new Independent Contractor Statement for the coming year.  Independent Contractor Statements DO NOT renew automatically.

If I file an Independent Contractor Statement does that mean I am an independent contractor for purposes of unemployment?
No.  The Independent Contractor Statement only applies to workers’ compensation issues.  These statements have no impact on an individual’s status as an employee for the purposes of unemployment and the Department of Labor WILL NOT accept statements as evidence that an individual is an independent contractor.

I received a predetermination from the Board last year.  Is the presumption of independent contractor status still valid?
Yes.  Predeterminations issued prior to October 25, 2023 remain valid for one year.  If you wish to file an Independent Contractor Statement after that, you can do so when your current predetermination expires.

Can I still request a predetermination using the old form?
No.  Beginning October 25, 2023, the Board will no longer accept or process old forms.  You MUST use the process described above.

What factors are used to decide whether a person is an independent contractor?
A person who performs services for remuneration is presumed to be an employee unless the employing unit proves that the person is free from the essential direction and control of the employing unit, both under the person's contract of service and in fact and the person meets specific criteria. In order for a person to be an independent contractor they must meet the test in 39-A M.R.S.A.    102(13-A).

Pursuant to this test:
A. The following criteria must be met:
(1) The person has the essential right to control the means and progress of the work except as to final results;
(2) The person is customarily engaged in an independently established trade, occupation, profession or business;
(3) The person has the opportunity for profit and loss as a result of the services being performed for the other individual or entity;
(4) The person hires and pays the person's assistants, if any, and, to the extent such assistants are employees, supervises the details of the assistants' work; and
(5) The person makes the person's services available to some client or customer community even if the person's right to do so is voluntarily not exercised or is temporarily restricted; and
B. At least 3 of the following criteria must be met:
(1) The person has a substantive investment in the facilities, tools, instruments, materials and knowledge used by the person to complete the work;
(2) The person is not required to work exclusively for the other individual or entity;
(3) The person is responsible for satisfactory completion of the work and may be held contractually responsible for failure to complete the work;
(4) The parties have a contract that defines the relationship and gives contractual rights in the event the contract is terminated by the other individual or entity prior to completion of the work;
(5) Payment to the person is based on factors directly related to the work performed and not solely on the amount of time expended by the person;
(6) The work is outside the usual course of business for which the service is performed; or
(7) The person has been determined to be an independent contractor by the federal Internal Revenue Service.

What if I have questions?
Questions can be emailed to ICS.WCB@maine.gov, or you may call the Workers’ Compensation Board at (207) 287-3751.