Don A. Fendon 2013-07-16 23:46:39
Don A. Fendon is a shareholder with the Fendon Law Firm, P.C. Mr. Fendon has worked in the workers’ compensation industry in Arizona since October, 1972. For more information call (602) 256-2000 or visit fendonlaw.net. Issues often arise in the workers’ compensation arena concerning whether someone who is injured is either an employee or an independent contractor. This is rather important in the entire scheme of things because if one is an employee of an individual, partnership or corporation and gets injured on the job, they are subject to the Workers’ Compensation Act (the Act) for coverage. On the other hand, if they are not an employee, they would have the right to bring an action against any entity as stated above for personal injury. In Putz v. Industrial Commission, 203 Ariz. 146, 51 P.3d 979 (Ct. App. 2002), the Court of Appeals determined that a contractor or individual who did not regularly or predictably hire help was not required to carry workers’ compensation insurance for his business. In the Putz case, the facts illustrated that the employer only hired individuals occasionally and unpredictably. In that instance, the employer was not subject to the Act. In the aforementioned case, the corporation hired only one employee in 2011 for only one day. Moreover, Mr. Putz was only hired for one job in 2012. Essentially, the applicant in the Putz case was not hired on a permanent basis and hence, was not subject to the Act. In Donahue v. Industrial Commission, 178 Ariz. 173, 871 P.2d 720 (Ct. App 1993) the Court of Appeals found that for an employer to be subject to the Act, it must hire workers regularly in its customary business. Essentially, an entity that has workers only on staff on an occasional basis is not included and not subject to the Act. The court in the Donahue case further found that A.R.S. §23-902 focuses on the hiring practices of the employer, not on the duties of the injured employee. The infrequent and unpredictable hiring of workers is insufficient to bring the employer within the terms of the Act. Therefore, in the Donahue case, where a general contractor who usually worked alone and hired only casual laborers two or three time per year, was not responsible for injuries sustained by a carpenter injured on the third day of a project that was almost completed. It is important to note that A.R.S. §23-902(A) excludes all domestic servants from coverage by the Act. Moreover, the definition of a domestic servant is one whose work is performed for the maintenance or repair of the master’s private property or care for the master’s family and whose work that is performed not within the usual trade, business, profession or occupation of the master. Obviously, a cleaning lady of one’s premises would not have to be covered under the Act. Certain employers also are exempt from providing workers’ compensation benefits coverage by the Act. Real estate agents for instance are excluded. In addition, a motion picture employer is exempt if it is filming in Arizona for a period not to exceed eight months and is otherwise insured by a workers’ compensation insurance carrier in the state where it is incorporated or has its principal offices. Some employers designate employees as independent contractors to avoid having to cover them with workers’ compensation insurance. This is frequently a legal fiction. Simply calling an employee an independent contractor does not define one’s employment status. A.R.S. §23-902(C) defines what an independent contractor is and those individuals are defined and excluded from coverage under the Act. The language of the statute has led to the development of the “right to control” doctrine. Moreover, the control indicia are numerous. They include the extent to which the employer may exercise control over the details of the work. (See Home Ins. Co. v. Industrial Commission, 123 Ariz. 348, 599 P.2d 801 (1979) and City of Phoenix v. Industrial Commission, 154 Ariz. 324, 742 P.2d 825 (Ct. App. 1987)). The duration of the employment is another factor which affects one’s employment status. If it is more than casual or for a few days or less, the applicant is probably an employee, vis-a-vis, an independent contractor. The method of payment, whether deductions are taken from earnings and whether a worker receives a W2 or 1099 is another important distinction. Also, the right to fire the person in question, who furnishes the work equipment and whether the work being done was and is in the regular course of the employer’s business are also indicia determining whether one is an independent contractor or employee. Essentially, in summary, one can group the indicia factors into control or into the relative nature of the work. In general, indefinite employment, weekly or semi-monthly pay with with holdings, the right to fire and whether equipment is furnished to complete the tasks for the employer weigh toward employee status. On the other hand, the relative nature of the work test is also a key factor. Under this test, the question is whether the work being done is an integral part of the employer’s regular business or whether the work performed is outside the scope of the employer’s business. The right to control the work test and the nature of the work being done test are inextricably intertwined with each other. Therefore, their weight often depends on particular combinations. Moreover, if the two occur together, they are invariably decisive. As an example of the relative nature of the work would be if an employer owns a truck and pays the driver of that truck by the hour. That would be sufficient to prove employment. The same thing can be said of taxicab drivers as another example. In the case of Greenway Baptist Church v. Industrial Commission, 130 Ariz. 482, 636 P.2d 1264 (Ct. App. 1981), the Court of Appeals set forth that there are indeed numerous factors and tests to determine whether one is an independent contractor or an employee and regardless of how the indicia are considered or weighed - the overriding caveat is that any decision regarding employment status must be based on the totality of the circumstances.
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