Tables Turned: Workers’ Compensation Law and the Language Service Industry
Arianna M. Aguilar
March 23, 2010
Most interpreters and translators are quite familiar with Workers’ Compensation cases. In fact, for many it is the bread and butter of their small business, as Workers’ Compensation insurance companies will authorize interpreting and translation services for a limited English proficient injured worker for countless medical appointments, hearings, meetings with attorneys, mediations and other approved ancillary services.
However, few in the language service industry have given much thought to how Workers’ Compensation law affects their bottom line; not as income, but as an expense, and very possibly, one that could wipe out their entire business and personal assets.
In the United States, each State regulates Workers’ Compensation law for their workers, and the requirements regarding who must purchase insurance and who is covered can vary widely. Employers can be required to purchase a policy, self-insure, apply for an exemption, or buy into a state-run program. Some States exempt very small businesses with a minimal number of employees from purchasing insurance. However, an exemption does not actually mean that the employer can’t be held responsible under Workers’ Compensation; it simply means the employer can forgo buying a policy and will have to pay any related expenses out-of-pocket. Unbeknownst to some, in many states, “independent contractors” without their own insurance are also considered “employees” under Workers’ Compensation law.
However, Workers’ Compensation State laws, regardless of the requirements, have the same intent. Attorney Zachary Sachs, senior and managing partner of Sachs & Zolonz law firm in California and expert in Workers’ Compensation law, says that the purpose of Workers’ Compensation law is “to cover a worker who is physically injured while in the employ of another.” The scope of injuries can vary widely, from back injuries sustained from pulling a file cabinet the wrong way, to slipping on a power cord at a job site, to catastrophic vehicle accidents en route to a job. Workers’ Compensation looks to compensate the worker for these injuries and permanent disability, provides benefits to a deceased worker’s family, and gives tort relief to the employer .
Workers’ Compensation law can be rather broad in defining “worker” and “employer.” In the wording of many State statutes, an employer can be defined as any person who hires another, with little consideration given to whether either party is a corporation, LLC, or sole proprietor. Also, “worker” can include an “employer’s” employees on payroll, 1099 subcontractors and sometimes even those subcontractors’ employees, if certain requirements are not met. For example, the State of North Carolina recognizes “statutory employees,” or the employees of a non-insured subcontractor that one may employ. Indeed, North Carolina board-certified Workers’ Compensation attorney Annemarie Pantazis explains that “employee” is a “legal definition” that must meet “judicial tests” .
Each state uses different tests to classify workers, and they may not be same as the IRS classification. Common tests are the “ABC test” and the “economic reality” and the “common law” test [3, 9]. For example, the ABC  test is widely used in courts to determine who is an independent contractor, and in general, states that a worker is an independent contractor if:
- The worker is free from control or direction over the performance of the services, both under contract and in fact; AND
- The services is either outside the usual course of business of the company, or is performed outside the company’s place of business; AND
- The worker is engaged in an independently established trade, occupation, profession, or business.
Sachs  gave an example of how the courts might determine worker status in California.
“As an independent contract interpreter, I’m asked by a client to send a Swahili interpreter, so I contact an interpreter that I know. He works as a Swahili interpreter for a living, has business cards, and has done interpreting on other legal matters. He is verifiable contractor in business from himself. Under this situation, I would not be required to cover him under Workers’ Compensation [in California]. However, let’s say that I call another interpreter, who is a stay-at-home mom, who is someone I have trained and goes to appointments only when I call her. In that case, she is a devoted interpreter whom I have trained and exert control over. In California, the courts will look at the element of control, the lack of verifiable status as a standalone earner for multiple other possible sources and probably would find her to be my employee. Workers’ Compensation is, at heart, a benefit delivery system, and judges in California are reluctant to find independent subcontractor status if they can find employee status.”
The determination of worker status usually only comes up if it is challenged by a worker, and is determined by the court on a case-by-case basis. Therefore, most courts do not have specific language in the statutes regarding the classification of Workers’ Compensation for each industry. However, the State of New York did publish guidelines in 2001 for determining worker status in the translating and interpreting industry for purposes of Unemployment, Labor Standards, and Division of Safety and Health .
Freelancers and companies try to skip around this issue by classifying all workers as independent contractors. This is attempted to be established by including contract language that states that no employer-employee relationship exists, that the “subcontractor” is responsible for his/her taxes, and that the “subcontractor” holds harmless and indemnifies the employer from any bodily injury. As a freelance interpreter, I have personally seen and have been asked to sign agreements that specifically state that I agree that I am not covered and will not sue under Workers’ Compensation.
However, Sachs  stated that the above practice is a “violation of public policy. A person cannot contract away their Workers’ Compensation rights. There are no exemptions for any occupation.”
Pantazis  agreed that those types of agreements are unenforceable as a matter of law and could not be used as defense in litigation, and are therefore, illegal contracts.
Therefore, those provisions are probably just psychological deterrents against litigation. In other words, if someone thinks they signed away their rights to sue, then they typically won’t sue.
But in what situation could a translator or interpreter theoretically be sued or could sue for Workers’ Compensation? Edward Priz , an insurance consultant on Workers’ Compensation costs for more than 30 years, gave an example: “Let say an interpreter is driving by car to meet a lawyer and gets in a wreck: in many states that could be held to be covered under Workers’ Compensation. It would be depend on the individual facts and the state. But in a lot of places, the odds are good for the injured interpreter. States tend to have a broad definition of what is work related, and travel to and from a job is often held to be work related.”
Interpreters, translators and their clients may think that they are protected against these types of circumstances if they themselves have a liability policy, or if they require subcontractors to have vehicle insurance. However, Sachs explains that liability policies only would come into play if an employer relationship could not be proven .
Therefore, what’s a language professional to do? The first step would be to inquire with an attorney regarding your home State’s requirements, as well as the States in which any subcontractors work. If may be that you are in fact required to purchase insurance.
In the case that you are not required to insure, it is important to be aware that if an independent contractor or employee ever filed a claim and was granted benefits under State law and there was no policy in effect, a granted claim could cause financial ruin, wiping out business and personal assets, including equity in one’s home, lien on future earnings, civil judgments, bankruptcy, and even criminal charges in some cases . Even if a contractor filed a claim with the State and was denied, the “employer,” without a policy, would bear the cost of their own legal defense.
This seems like an undue burden, but it is one that an increasing number of freelancers are facing. More and more institutions (such as hospitals) are getting audited by the holders of their own Workers’ Compensation insurance policies and are trying to minimize their premium by and turning around requiring even individual freelance interpreters and translators to provide proof of insurance.
The cost of a policy for a small operation is typically less than $1,000, is a fully deductible expense, and will cover the cost of defending or paying for any Workers’ Compensation claims made while the policy is in effect. Unless the employer is allowed to opt out of the policy, an “employer” who only employs himself would also be covered. This can provide invaluable coverage for independent contractors, especially if they are working in higher risk institutions .
In fact, sign language interpreters, who are more heavily regulated by the US government, are quite familiar with Workers’ Compensation and take steps to prevent injuries such as repetitive motion injuries, and there are companies who specialize in providing policies for interpreters .
While so far, Workers’ Compensation litigation involving interpreters or translators has been nearly nonexistent, the reality is that it takes only one case involving a translator or interpreter injury to make the courts take notice and therefore turn Workers’ Compensation insurance into a standard expense for interpreters and translators.
- Disability Resource Center, San José State University. Deaf and Hard of Hearing Program Required Procedures for Interpreters and Captioners. Accessed 18 Feb. 2010. Page 5.
- Illinois Workers’ Compensation Commission. Press Release, June 3, 2009. Employer Closed Down for Failure to Obtain Workers’ Compensation Insurance. www.iwcc.il.gov. Accessed 18 Feb, 2010.
- Michigan Insurance Bureau. Coverage Questions for Subcontractors, General Contractors, and Independent Contractors. PDF file. Accessed 17 Feb 2010.
- New York State Department of Labor. Guidelines for Determining Worker Status: Translating and Interpreting Industry. IA 318.20 (9-00). Accessed 17 Feb. 2010.
- Pantazis, A. Telephonic Interview. 9 Mar. 2010.
- Priz, E. and Priz, S. Workers’ Compensation Insurance. A Field Guide for Employers & Others. Advanced Insurance Management. Riverside, IL. 2010.
- Priz, E. Telephonic Interview. 17 Feb. 2010.
- Sachs, G. Telephonic Interview. 18 Feb. 2010.
- Texas Workforce Commission. Independent Contractor Tests. http://www.twc.state.tx.us/news/efte/independent_contractor_tests.html.
- United States v. Silk, 331 U.S. 704 (1947) (Economic Reality Test).