Home > Uncategorized > No Virginia, You Can’t Contract Out of Workers’ Compensation

No Virginia, You Can’t Contract Out of Workers’ Compensation

March 29th, 2013

As my dear readers may recall, the issue of independent contractor vs. employee is one that has been discussed at some length on this blog.  But the issue is one that is alive and well and comes up again and again.  Spelling life or death for a claim, the issue can determine if the injured worker was an employee covered by the employer’s workers’ compensation policy, or a self-employed life-gambler, taking his or her chances against injury.  It also spells the difference between penalties and a misdemeanor for an illegally uninsured employer, or an entity in the clear.

This issue came in the case of Jennifer Alcedo v. SCI/On Trac.  Applicant was a truck driver for On Trac, and would arrive in her own car (with an On Trac logo) at On Trac headquarters every morning and begin her assigned routes and packages deliveries.  She wore a uniform with the company logo, had a regular schedule, and was not allowed to do delivery work for any other company.  Nor was she allowed to turn down an assignment from On Trac.  So, she claimed, she was an employee and entitled to workers’ compensation benefits.

On Trac, on the other hand, produced an Independent Contractor Agreement, which applicant signed by claimed to not have understood because of language difficulties (the agreement had not been translated into Spanish for the applicant).

The Workers’ Compensation Judge found (unsurprisingly) that applicant was an employee and not an independent contractor.  Defendant was unable to produce a witness to testify on its behalf, and the WCJ held that the defense failed to carry its burden to rebut the Labor Code section 3357 employee presumption.   The Workers’ Compensation Appeals Board denied reconsideration.

But, even though the issue of “meeting of the minds” and language barriers was present in this case, the bigger deal was that the facts were all in favor of an employment relationship and only a signed contract was available to show an independent contractor arrangement instead.  Unfortunately, California does not allow employers and employees to contract out of workers’ compensation, so simply designating an employee as an independent contractor will not do.

And therein lies the dilemma for many employers – each would like to avoid the liability involved in having an employee, but is unwilling to give up the control that independent contractors cannot and will not offer.

Have a good weekend, folks!

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