Hurt at Work? Hustling Online? Is There a Risk to My Workers’ Comp Benefits?
Learn about your rights and responsibilities when selling crafts or products online while receiving workers’ compensation in Colorado
Many workers teeter on a financial tightrope, each paycheck meticulously balancing the weight of their livelihood. Even a minor work injury can throw a wrench into this fragile balance, sending the carefully stacked bills tumbling like dominoes.
As the stress piles on, it often adds to the physical pain and makes recovery itself feel like an uphill battle. This is the grim reality for many injured workers, and the truth is that one workers’ comp misstep can trigger a ripple effect, wreaking havoc on their lives and the lives of their loved ones.
Are you working from home while injured? Selling crafts on Etsy while recovering from surgery?
In today’s online world, where the side hustle thrives, things can get confusing when it comes to workers’ comp and benefits checks.
If you’re a Colorado worker who’s been hurt on the job and thinking about earning supplemental or online income, you may be overwhelmed by the rules around working while receiving benefits checks, which can feel like a tangled mess.
This is because the intersection of Colorado workers’ compensation benefits and online business revenue or a secondary income is often shrouded in ambiguity.
In this article, we’ll try to provide you with some clarity on your legal rights and responsibilities around earning extra income through an online side hustle while on workers’ comp after an injury.
Insight from Denver workers’ comp attorney Mack Babcock about making side money from sites like eBay, Etsy, Amazon or Poshmark while on workers’ comp:
“There is not a clear answer to this question. It really depends on the circumstances.
If an injured worker was performing work (not just selling goods) through these platforms prior to the injury, they can have what they were earning included in their ‘wages’ for purposes of benefit calculations.
If they were then unable to perform that work after an injury, the lost earnings would then have to be covered under the wage loss benefits (temporary disability benefits).
If they are able to continue the work they were doing through these platforms after an injury, they are still included in benefit calculations, but they do not get wage loss benefits (because they are not losing this income).
The more complicated situation is when someone was not earning money through these platforms prior to an injury but then does so after an injury to supplement their wage loss benefits.
Again, if they are not ‘working,’ it is not an issue. For example, if you are selling your old clothes on eBay, Facebook Marketplace, etc., that probably is not an issue. However, if you are performing services—babysitting, knitting baby blankets, making watercolor, mowing lawns, etc.—that is an issue.
If an injured worker returns to work, they have to report that to the insurance carrier, and then the carrier gets to reduce their temporary disability benefits by the wages they are earning in that new employment.
Thus, the issue is that providing services through these platforms could be interpreted as a return to work.
The big rub is that injured workers have an affirmative duty to report a return to work. The number one reason for an injured worker to find themselves charged with criminal insurance fraud is what we call ‘working while receiving.’
In other words, double-dipping or returning to work without reporting it to the insurance carrier and then continuing to cash temporary disability benefit checks that are being paid based on their being unable to work.
Some situations are clear-cut—mowing lawns over Facebook Marketplace is clearly pay for work or a return to work. We see borderline or questionable situations all the time. We always have to tell clients they are putting themselves at significant risk.”
Learn about the differences in Colorado between workers’ compensation and private short/long-term disability benefits a worker may have through a group policy from their employer, a group policy through their union, or an individually purchased policy.
You have rights and options
Every case is unique. There’s no one-size-fits-all answer. Whether online business activities affect workers’ comp benefits depends heavily on the specific circumstances.
As always, there are challenges:
- Vague definitions. “Work” and “services” are open to interpretation, leaving room for confusion and potential disputes.
- Risk of misinterpretation. Some activities might seem harmless but could be considered work by the insurance company.
- Fear of consequences. The emphasis on fraud can scare workers away from legitimate income opportunities.
Any injured worker getting secondary income should consult a work injury attorney who can provide personalized guidance and minimize risks.
Can I continue my pre-existing online business while receiving workers’ comp benefits?
Generally, it’s okay to continue your online business if:
- You were earning through these platforms before your injury. Your pre-injury income from the business will be factored into your benefit calculations. If your injury prevents you from continuing the same level of work, you may be eligible for temporary total disability (TTD) benefits or temporary partial disability (TPD) benefits to cover the lost income.
- You’re selling your own personal items, like clothes or furniture. This wouldn’t be considered “work” and shouldn’t impact your benefits.
However, things get trickier if:
- You start performing services through the platforms after your injury. This could be interpreted as “working” and lead to your benefits being reduced or even cut off. Examples include activities like babysitting, knitting for sale, or lawn mowing.
- You don’t report any income from your online business to the insurance carrier. This is a major no-no. Injured workers have a legal obligation to report all income, even small amounts. Failure to do so is considered fraud and can have serious consequences, including criminal charges.
What if I start a new online business to supplement my income after my injury?
Remember, there’s no one-size-fits-all answer. Consider potential issues such as:
- “Work” vs. “hobby.” The key distinction hinges on whether your new online activity would be considered “work” by the insurance carrier. Selling crafts on Etsy that you made pre-injury might be okay, but offering new services like graphic design or tutoring could raise red flags.
- Impact on benefits. Any income you earn could reduce your temporary disability benefits proportionally. Remember, the insurance company aims to compensate for lost wages due to your injury.
- Duty to report. Always report any new income to the insurance carrier, even if it’s minimal. Failure to do so can lead to serious consequences, including fraud charges.
The line between hobby and work can be blurry, so err on the side of caution when starting a new online business while on workers’ comp. Talk to your lawyer or the insurance carrier beforehand to clarify if it would be considered a return to work.
Transparency and honesty are always the best policy
Committing fraud while receiving workers’ comp benefits has severe consequences. Financial pressure mounts, bills pile up, and the allure of supplementing income can be enticing. But remember, the risks far outweigh any perceived short-term gain.
You often see them in the news or in forums like Reddit: stories about video surveillance leading to unfortunate outcomes for workers. Here’s one such story of someone seeking advice about a side job while recovering from an injury:
So my girlfriend recently got on workers comp due to an injury. However she decided to do Uber eats since her pay was going to come up short and she wouldn’t be able to pay for her bills. Two days after she started doing this she found out that it can disqualify her from receiving workers comp. So my question is will working Uber eats affect her workers comp or will the $50 she made cause her to lose workers comp?
Answer from a Reddit user:
“…be 100% transparent with her employer and insurer about what she’s doing and why. I suggest all such communications be in writing (email is fine) so you can prove what was said later if necessary.
I had a case a few years back where the guy got a job while he was receiving weekly “total disability” benefits. We found out he was working for a car dealership, so we got suspicious. I took his deposition, and he denied he had worked anywhere since his accident. We then sent a subpoena to the car dealership, and cut off all of his benefits. Once the case was over, my client sent a copy of the car dealership pay records, the workers’ comp pay records, and the guy’s deposition to the local county district attorney.
Claimant was arrested and later convicted of 13 counts of fraud—one for every workers’ comp check he cashed while having the other job.”
Remember, transparency is key to avoiding trouble. If you’re unsure, don’t risk your benefits. Seek professional advice.
Injured workers deserve a system that acts as a safety net, not a tangled web of bureaucracy. They shouldn’t face the additional burden of navigating complex legal processes and deciphering confusing paperwork while managing recovery.
We understand. We’ve been fighting for injured Colorado workers for over 20 years. This is about real people and families facing unimaginable hardship.
Let’s advocate for a system that prioritizes understanding, support and fair compensation so that workers can focus on healing and rebuilding their lives, not battling for their basic rights.
Talk to our Denver workers’ compensation attorneys
The Babcock Law Firm has vigorously advocated for workers from every corner of the state, spanning from the Eastern Plains through the Front Range and reaching to the Western Slope in many workers’ compensation cases.
Testimonials from our clients stand as a testament to our dedication. We have successfully assisted hundreds of clients going through severe work-related injuries, ensuring they receive the necessary medical attention and financial settlements to aid in their comprehensive recovery—physical, emotional and financial.
Your initial consultation with one of our attorneys is 100% free, so there’s no cost and no commitment necessary to learn about your legal options and next steps.