Is Disability and Paid Family Leave Benefits Coverage Required?

Disability and Paid Family Leave benefits coverage is not required for independent contractors because they are not employees as defined in the Disability Benefits Law. The following factors are used to determine whether an individual, outside the construction and transportation industry, is an independent contractor. An individual may be an independent contractor if they:

1. obtained their own Federal Employer Identification Number (FEIN) or have filed business or self-employment income tax returns based on work or service performed in the previous calendar year.
2. maintains a separate business establishment;
3. performs work different from that of the hiring business and works for other businesses;
4. is responsible for performing satisfactorily under a specific contract and is in a position to succeed or fail if the business' expenses exceed its income;
5. has appropriate liability, workers' compensation, and disability benefits insurance policies under its own legal business name and FEIN
6. has recurring business liabilities and obligations;
7. advertises their own business;
8. provides all equipment and materials necessary to fulfill the contract;
9. controls the time and way the work is done; and
10. works under their own operating permit, contract or authority.

Related Information

• Construction Industry Fair Play Act
• Commercial Goods Transportation Industry Fair Play Act
• Identifying an Independent Contractor