Statutory Employment Shocker – Part I
Statutory Employment rears its ugly head in two states this week.
Statutory employees were really one of those under the radar subjects in Workers Compensation. South Carolina deemed a contractor as a statutory employee a few years ago. The subject seemed to not come up again until two recent cases.
Pennsylvania’s statutory employment law was considered one of the most conservative when determining the employment status of a subcontractor. That stance changed this week as PA’s Supreme Court stretched the boundaries of the employee/employer relationship further than most states.
According to a very well written article, the PA Supreme Court ruled that for Workers Comp “non-premises-based contractors may be viewed as statutory employers for the purpose of claiming benefits.” The basic premise is the claimant (trucker) was an employee of another company. One of the stark parts of the ruling is what I have been warning employers about for years.
The Ladder of Insurance (c) was applied in this case as the claimant’s direct employer had no WC insurance. The court went up the ladder to the company that had no idea the injured employee’s employer had no WC insurance. I cannot imagine the response of their WC carrier. Would they possibly deny the claim for non-coverage? That would likely initiate another lawsuit.
I have written many articles on this subject as I have seen so many employers pay claims for unknown employees. This is why certificates of insurance are golden for risk transfer between contractors and subcontractors. Ask for them or be ready to get out the checkbook.
I will cover the Missouri statutory employment case next time.
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