First and foremost, I want to state that I hope anyone reading this is healthy and safe during this unprecedented pandemic.

Many of my colleagues are currently writing about workers’ compensation in regard to the coronavirus. The workers’ compensation act does cover occupational diseases and the bureau has specifically recognized COVID-19 as a recognized cause and condition. However, proving causation may be challenging given how widespread nature of the virus. If you feel that you have a potential claim do not hesitate to contact my office.

That said, I want to focus on a fairly frequent defense of insurance companies. They attempt to classify a worker as an independent contractor rather than an employee in order to avoid paying benefits for an injury on the job. In many cases, the lines are blurred. If you are injured on the job, these blurred lines could have catastrophic consequences.

Understand the Basics

One of the basic principles that is nationwide among workers’ compensation systems is that employees are eligible for workers’ compensation but independent contractors are not. Many employers misclassify employees as “independent contractors” to avoid certain financial responsibilities such as being subject to the Pennsylvania Workers’ Compensation Act. As a worker in Pennsylvania, it is important to understand your rights.

Are You an Employee or Contractor?

Employee or Independent Contractor: Who Makes the Call and How is it Made?

The distinction between employee vs. independent contractor in workers’ compensation is determined based upon factors that are similarly used in federal tax law. As boring as that sounds, it’s important to keep reading! An employer may tell you that you are being hired as an independent contractor or an employee, but it is ultimately up to the Internal Revenue Service (IRS) and how it classifies your work. The IRS looks at three key factors:

Behavioral Control:
A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised. Decisions like when and where to work, what tools to use, degree of instruction, evaluations and training are all considered Behavioral Control.

Financial Control:
Does the business have a right to direct or control the financial and business aspects of the worker’s job considering investments, profit and loss opportunity, methods of payment, etc?

Relationship:
The type of relationship depends upon how the worker and business perceive their interaction with one another including items like written contracts, benefits, the time frame of the relationship and if the services provided are they key aspects of the business.

Construction Workplace Misclassification Act (CWMA)

In the construction industry, independent contractors are commonly used and in 2011, Pennsylvania established a definition of “independent contractor” for purposes of workers’ compensation. The CWMA uses the following criteria for determining if a worker is an employee or independent contractor:

  • The individual must have a written contract to perform services;
  • The individual must be free from control or direction over the performances of such services;
  • The individual must be customarily engaged in an independently established trade, occupation or profession, with a separate business location; and
  • The individual must maintain liability insurance during the term of the contract.

In 2018, the requirements of the CWMA were put to the test when it reached the Appellate Courts with D & R Construction v WCAB. The court ruled that, for injuries occurring at construction sites on or after 2011, the injured worker will be deemed an employee, unless all of the mandatory criteria are in place for a finding of independent contractor status, pursuant to the CWMA. All criteria must be given equal weight by a Workers’ Compensation judge. If one is absent, the worker is deemed an employee.

A Painter Hires a Drywall Expert: A Hypothetical Example

A painter uses someone to handle drywall installation. The painter tells his drywall person that he can give him full time work but never indicates that he is an employee or independent contractor – no contract was drawn. The drywall workers is paid hourly and is expected to be on the job on a full time basis. The drywall worker gets injured on a job site. He or she can successfully file a workers’ compensation claim simply because he or she never signed any paperwork indicating he or she was hired as an independent contractor. Furthermore, the “behavioral control” and “financial control” aspects of the work make that the likely conclusion.

Who’s The Boss

It often comes down to “Who’s the boss?” Is it the injured worker or the employer? Does the worker have independent use of his or her skill? Is he or she doing a certain piece of work at a fixed price for a lump sum or a measurable basis? Is he or she free to use whatever help to get the job done? Does he or she set his or her own hours? Who supplies the tools? Who controls the means and methods for completing the work.

 

If you have been denied workers’ compensation benefits and have been misclassified as an independent contractor, it is important to contact a certified workers’ compensation attorney. Please call my office for a free consultation.