In most circumstances, an employee cannot sue his or her employer for injuries sustained while on the job. Section 303(a) of the Pennsylvania Workers’ Compensation Act, commonly known as the “exclusivity provision,” makes workers’ compensation the exclusive remedy. However, the exclusivity provision does not apply to “independent contractors.” What does this mean for you? For employers, you could be subject to criminal and civil penalties. For employees, you could be passing on compensation rightfully owed to you for your injuries.
Pennsylvania courts use a variety of factors to determine whether an injured person is an employee or independent contractor. In 1968, the Pennsylvania Supreme Court adopted factors including “[c]ontrol of manner work is to be done; responsibility for result only; terms of agreement between the parties; the nature of the work or occupation; skill required for performance; whether one is engaged in a distinct occupation or business; which party supplied the tools; whether payment is by the time or by the job; whether work is part of the regular business of the employer, and also the right to terminate the employment at any time.” Hammermill Paper Co. v. Rust Eng’g Co., 430 Pa. 365, 370, 243 A.2d 389, 392 (1968). The factors set forth in Hammermill are still used today.
Noticeably absent from the list of factors is the subjective belief of the employee and employer. The employer and the employee’s belief as to the nature of the employment relationship is irrelevant in making this determination. This means that the decision is completely up to the court.
Why does this matter?
For employers, you may be risking criminal and civil penalties. If an independent contractor working for you is injured on the job, and the court rules that he or she is an employee, you may be subject to criminal and civil penalties. For this reason, employers should carefully consider whether to carry workers’ compensation insurance.
For employees, the court’s ruling as to your employment relationship can affect the amount of compensation you receive for your injuries. In a civil action, an injured person can make claims not available to the workers’ compensation case plaintiff. These include pain and suffering, inconvenience, change in quality of life, among others. These claims can add significant value to the total compensation received. Additionally, employees who have sustained injuries while on the job should consider whether they should take workers’ compensation, or whether they may be entitled to a civil claim for personal injuries.
Regardless of whether you are an employee or employer, the lack of clarity on this issue could give you pause for concern. If your independent contractor is injured, will the court deem him an employee? If you are an employee, are you forfeiting damages potentially owed to you by settling for workers’ compensation?
If you are an employer who has been sued by an independent contractor, or if you are an employee who has been injured on the job, please feel free to call the experienced personal injury and workers’ compensation lawyers in our Greensburg and Connellsville offices.
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