An independent contractor is an individual or company that has signed an agreement with another party to perform any work or function on that party’s behalf without the direction or control of that party. When it comes to workers’ compensation, many states have criteria that determine whether a person works as an independent contractor or an employee. A worker who is classified as an independent contractor and not an employee is not eligible for benefits under the other party’s workers’ compensation policy. Despite established rules, the distinction between an independent contractor in many jurisdictions remains a legal ambiguity.