Pennsylvania Commonwealth Court Once Again Addresses Who is an Employee and Who is an Independent Contractor for Purposes of Determining Entitlement to Receive Workers Compensation Disability Benefits

The Pennsylvania Courts have addressed the issue of independent contractor v. employee in the workers compensation context quite a number of times. An independent contractor is not entitled to workers compensation benefits from the agency or company for whom he/she is providing services if he/she is injured while providing those services. An employee is entitled to workers compensation benefits if injured while performing such services.

Whether a worker is an employee or an independent contractor is a question of law to be determined by a Workers Compensation Judge after evidence is presented. However, the determination is heavily dependent upon the facts of the relationship between the injured worker and the company for whom he/she was providing services. The Courts have stated that there is no “hard and fast” rule as to whether that relationship is “employer-employee” or “owner-independent contractor”. Courts must consider the following factors:

  1. control of the manner in which the work is done;
  2. whether there is responsibility for result of the work only and not the manner in which it is performed;
  3. the terms of any agreement between the parties;
  4. the nature of the work/occupation being performed;
  5. the skill required for performance;
  6. whether one is engaged in a distinct occupation or business;
  7. which party supplies the tools/equipment;
  8. whether payment is by time or by the job;
  9. whether work is part of the regular business of employer; and,
  10. who has the right to terminate employment.

Control over the work to be completed and the manner in which it is to be performed are the primary factors in determining employee status.

In Edwards v. WCAB (Epicure Home Care, Inc.), decided March 10, 2016, the Pennsylvania Commonwealth Court ruled that Ms. Edwards (a home health caregiver) was an independent contractor and not an employee of Epicure Home Care, Inc. for whom she performed the caregiver services. In reaching its decision in Edwards, the Court relied on a similar decision (Fletcher v. WCAB (Saia d/b/a Visiting Angels)) reached in 2010. In Fletcher, the injured worker performed services as a home health aide for a client of a senior home care referral agency. The Workers Compensation Judge had determined that the agency was not the employer of the injured worker. In reaching the determination, the Workers Compensation Judge found that the agency did not supervise the worker’s job activities and exercised no control whatsoever over the worker’s activities at the client’s residence. Rather, the client supervised and controlled the injured worker’s job activities.

Moreover, the client paid the worker directly and no taxes were withheld. The injured worker had the option to negotiate the rate of pay with the client directly and not through the agency. The Workers Compensation Judge further found that the worker had signed a caregiver agreement with the agency acknowledging that she was an independent contractor.

The Judge’s decision was upheld by the Workers Compensation Appeal Board and the  Pennsylvania Commonwealth Court.

In Edwards, the Workers Compensation Judge found that the worker was an employee of the company but that decision was reversed by the Workers Compensation Appeal Board. The Appeal Board found that the worker was an independent contractor and therefore was not entitled to workers compensation benefits from the company. The Commonwealth Court then affirmed the Workers Compensation Appeal Board.

In Edwards, the Workers Compensation Judge found factors indicative of an employer-employee relationship. The company provided guidelines to the injured worker which included instructions on personal services provided. The company also directed the injured worker to wear scrubs, maintain records on arrival and departure times, not to leave clients unattended, maintain confidentiality, and not to use cell phones. The company also established the working hours and wages, and had the ability to terminate the employment.

However, the Workers Compensation Judge also made other findings supporting the worker’s status as an independent contractor. The company billed the clients and set a suggested rate of pay but the clients paid the worker directly and determined the rate of pay.

The worker deducted her own taxes from the payments she received from the client and identified herself as self-employed on her tax returns. The company did not provide any sick time, vacation or holiday pay. The worker signed an agreement which stated that caretakers are not employees of the company, that caretakers were to be paid directly by the client, and caretakers were responsible for deducting their own taxes.

Most importantly, as the Court had found in Fletcher, the injured worker’s day-to-day tasks were controlled by the client and not the company. Although the company provided a general set of guidelines for the worker, it did not prescribe actual tasks to be completed or the manner in which work was to be performed. The injured worker did not check in with the company on a daily basis. The worker could take time off at her discretion. The company did not supply the uniform or other implements of work. Although the company matched clients to caretakers, the clients possessed the ultimate power to maintain or discharge the caretakers, and set the final rate of pay.

Ultimately, the Commonwealth Court found that control over the worker was not exercised primarily by the company but rather by the client of the company. Therefore, the Court determined that the worker was not an “employee” of the company.

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If you have been injured at work and are denied workers compensation benefits because it is alleged that you are an independent contractor, contact John J. Stanzione, Esq. at 610-430-8000 /

Mr. Stanzione has over 30 years of experience representing employees with respect to multiple employment matters including workers compensation claims, wage loss claims, claims for wrongful termination and discrimination claims. In addition, the law firm of Lamb McErlane is a multi-service law firm with attorneys specializing in several legal disciplines such as business law, family law, personal injury law, criminal law, corporate transactions, social security disability, wills and trusts, estate planning and real estate law.