At the core of the workers compensation bargain is the employer-employee relationship. Where that relationship does not exist between the parties, as where there has been a conscious and deliberate effort to substitute an independent contractor relationship for an ordinary contract of employment, workers compensation law usually acknowledges the desires of the parties and does not offer the burden and protection of the jurisdictions compensation act. I am often asked questions related to this by new business or small business owners and wanted to point out that updates to this legal doctrine constantly evolve.
Larson’s Workers’ Compensation Law: Chapter 63, which discusses whether such deliberate substitution is effective to avoid compensation liability, has also been upgraded and revised. In most cases, the actual facts of the relationship control; the legal name and form given it do not. While the law generally acknowledges that parties should be free to designate their working relationships as outside the usual bonds of employment, it must be remembered that society is also a party to the "workers compensation bargain;" it has an interest in assuring itself that the cost of worker "wear and tear" is fully included in the price of the good or service and not borne disproportionately by the public.
© Copyright 2010 LexisNexis. All rights reserved. This material is excerpted from Larson’s Workers Compensation Law. Reprinted with permission.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
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