Tuesday, August 16, 2016

Employee vs. Independent Contractor

In many construction cases, there is often an issue involving whether a worker is an "employee" or whether they are an "independent contractor."  The reason this is important is that if they are injured on the job, an employee's injury will be covered by workers' compensation whereas an independent contractor's injury will not.  Therefore, determining what category you fall under can be daunting.  Oftentimes the general contractor on a construction project will argue that an injured employee is actually an independent contractor; thus, the general contractor is not responsible for any injuries.

Over the years Pennsylvania Courts have struggled with the concept of defining an employee versus an independent contractor.  In 2010, the Pennsylvania Legislature enacted the Construction Workplace Misclassification Act (CWMA), which, in part, attempted to clarify who is and is not an independent contractor (in the construction industry) for the purposes of workers’ compensation coverage.  Section 3(a) of the CWMA provides: “For purposes of workers’ compensation . . . an individual who performs services in the construction industry for remuneration is an independent contractor only if: (1) the individual has a written contract to perform such services; (2) the individual is free from control or direction over performance of such services both under the contract of service and in fact; and (3) as to such services, the individual is customarily engaged in an independently established trade, occupation, profession or business.” 43 P.S. §933.3(a).

To the extent an individual does not meet such definition, the individual will be deemed an employee and the general contractor/employer will be responsible for maintaining and providing workers’ compensation coverage for such individual.  Further, if the worker is to be a valid independent contractor, the written contract under the law should be signed by the worker before the injury takes place.

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