Can Rideshare Drivers Get Workers’ Comp in North Carolina?

Workers’ compensation is a form of insurance that many companies doing business in North Carolina carry to provide benefits to their employees in the event of a work-related injury, illness, or other medical condition.

These benefits cover medical care costs and can provide partial wage replacement benefits if the worker is temporarily or permanently unable to go back to work.

Not all businesses carry workers’ comp policies. Also, not all workers for companies that do have workers’ compensation insurance are eligible to receive workers’ compensation benefits. Independent contractors generally are not entitled to receive workers’ comp benefits even if they are injured while performing services for the businesses that hire them (but depending on contract, vehicle ownership, and business structure, coverage obligations may shift).

Rideshare companies, like Uber or Lyft, use business models that classify their drivers as independent contractors. These models have been subject to challenge. Some states, most notably California and Massachusetts, pushed back against the independent contractor classification and have claimed that rideshare drivers are, in fact, employees entitled to workers’ compensation benefits. Also, depending on the administration, The U.S. Department of Labor has shifted its position on the classification of workers as employees instead of independent contractors for wage and hour purposes rather than workers’ compensation.

In North Carolina, most rideshare drivers are classified as independent contractors and therefore are generally not eligible for workers’ compensation – though eligibility ultimately depends on the degree of control the company exercises over the driver’s work.

At Price Petho & Associates, we represent North Carolina workers who have workers’ compensation claims under the state’s workers’ comp laws. In this post, we examine how rideshare drivers are treated under workers’ comp generally and in North Carolina.

Who is an independent contractor?

The North Carolina Industrial Commission (the NCIC) administers this state’s workers’ compensation laws. The NCIC states on its website that businesses that employ three or more employees generally must carry workers’ compensation insurance. For our purposes here, the immediate question is how North Carolina law defines an “employee” for workers’ comp purposes.

The NCIC determines whether a worker is an employee or an independent contractor for workers’ compensation purposes. The NCIC applies a common-law ‘right-to-control’ test that looks at how much control an employer exercises over how, when, and where the work is performed. The federal “economic reality” test is a separate standard that is used under the Fair Labor Standards Act for wage- and hour-related issues. It is not used to determine workers’ compensation eligibility in North Carolina.

According to the NCIC, a company calling a worker an independent contractor by itself is not determinative. This is true even if the company hires the worker on a Form 1099 basis. The NCIC may still find a worker to be an employee based on factors like the right-to-control.

How do other states consider rideshare workers under workers’ compensation?

Another consideration is how other states have handled this question under their own workers’ compensation laws. Two states in particular, California and Massachusetts, have attempted to enact legislation and policies to make it easier to classify workers as employees instead of contractors.

The California legislature’s attempt to classify rideshare drivers as employees

In 2020, the California state legislature passed legislation that, for practical purposes, would have made rideshare drivers employees in that state.

Uber and Lyft supported efforts to carve out an exception for themselves to this new law. This effort succeeded in 2022, so rideshare drivers remain independent contractors there at least for now, but with some statutory benefits.

Massachusetts’s litigation efforts to make rideshare drivers employees

In Massachusetts, the state’s attorney general filed a lawsuit in 2020 against Uber and Lyft to force them to classify their rideshare drivers as employees.

In June of 2024, this lawsuit was settled out of court. Under the settlement terms, Uber and Lyft agreed to pay their drivers a higher minimum wage and to provide employment benefits. But the employee versus independent contractor question was left out of the settlement, so the rideshare drivers effectively remain independent contractors there for the time being.

For North Carolina rideshare drivers, the efforts of these two states to classify such workers as employees means that although for now they are treated as independent contractors, this may eventually change depending on the prevailing socio-political climate.

If one day enough momentum gathers behind broader state or national efforts to reclassify rideshare drivers as employees, North Carolina could consider changing its own workers’ compensation laws.

Conclusion

In many cases, rideshare drivers in North Carolina will face challenges obtaining workers’ comp – though eligibility depends on the factual circumstances and a full analysis by the NCIC.

At Price Petho & Associates, our North Carolina workers’ compensation attorneys are constantly keeping up with changes in how employee versus independent contractor disputes are affecting rideshare workers and workers generally for workers’ comp benefits.

If you have a workers’ comp claim or questions about whether you qualify for workers’ compensation benefits in North Carolina, then call us today to speak with one of our experienced workers’ compensation lawyers. Or, if you prefer, you can reach us through our online contact form.