Home > Uncategorized > Do Pinky and the Brain need Workers’ Compensation Insurance? (Part 3 of 3)

Do Pinky and the Brain need Workers’ Compensation Insurance? (Part 3 of 3)

October 25th, 2013

So, dear readers, we learned that the ambitious and totally unlucky laboratory mice, Pinky and the Brain, are probably forming a partnership during their nightly ventures to take over the world.  We have also reckoned that, in all likelihood, they are not covered by the requirement to purchase workers’ compensation, and won’t be covered by any policy unless they go out and buy it themselves.

However, does that mean that the business-killing monster known as workers’ compensation does not apply to partners in partnerships?  After all, if your humble blogger was hired to build a house, and wanted to hire a dozen or so workers to get the job done, couldn’t he just have the dozen workers form a partnership and hire the partnership?  What if they were all independent contractors forming a partnership?

Not really.  After all, Labor Code section 3360 holds that workers forming a partnership for a particular piece of work are employees of the person having the work done, unless the workers purchased workers’ compensation insurance for themselves.

In fact, the situation was explored in the case of Jose Guzman v. Workers’ Compensation Appeals Board (1984).  There, Guzman worked as a tree pruner for one company, and his cousin was a head gardener for a hotel.  Guzman’s cousin often contracted for specific jobs on weekends and Guzman helped him.  For one job, Guzman’s cousin offered to split the fee 50-50, and each provided some of their own tools to get the job done.

On that job, Guzman sustained an injury and filed a claim against the alleged “employer,” a gas station for whom the work was being done.  At trial the workers’ compensation Judge found that Guzman and his cousin had formed a partnership for the specific job, and so Section 3360 applied to place liability on the gas station for the injury.  The WCJ ruled that independent contractor status did not negate section 3360.

The Workers’ Compensation Appeals Board reversed, reasoning that Guzman, his cousin, and the partnership were all independent contractors and that, because Guzman and his cousin had done this type of work together for other customers before (and had not formed the partnership just for this one job), section 3360 did not apply.

The Court of Appeal, on the other hand, agreed with the WCJ.  Recognizing that Guzman probably qualified as an independent contractor, the Court of Appeal still held that even if the partnership is an independent contractor, section 3360 still applies. Furthermore, the Court of Appeal held that a history of such one-job ventures does not negate the elements of section 3360.

So, dear readers, to sum up – Pinky and the Brain, so long as they truly are partners, don’t need to get workers’ compensation insurance for themselves while they are trying to take over the world.  But as for Brian and Mr. Pinkman?  It might make it easier to sell their services if they can assure whoever is hiring them that they come with insurance provided.

As for the folks out there considering hiring someone for a particular job, be very careful about the effect of section 3360 – even independent contractors can suddenly be entitled to workers’ compensation benefits if they form a partnership just for this particular job.

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