Independent Contractors Who Are Covered by Louisiana Workers Compensation

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Injured workers, who appear not to be employees and yet spend a substantial amount of their time in manual labor carrying out a contract, very often are not running a business organization separate and independent from that of the person with whom they have contracted.

If an injured worker (who appears to be an independent contractor and arguably is not covered) is in fact running an enterprise separate from that run by his principal, then this worker will not be covered by the  workers compensation insurance of the principal/employer.  This worker will need to provide his or own insurance.

But if an injured worker (who appears to be an independent contractor) is clearly NOT running a business enterprise separate from that run by his principal, then this worker will be covered by the principal's workers compensation insurance.

Louisiana courts look to certain factors in situations like these in order to identify an independent business enterprise, and thus award workers compensation benefits.

Specifically, when examining an independent business enterprise, Louisiana courts look at: 

  1. The performance of a specified piece of work as a whole or as a unit for a specified price for the whole or for any unit of the service; 
  2. The extent of control of the person performing the service over the means and methods by which the work is performed so as to accomplish the work as a unit or as a whole;
  3. The right of the person rendering the service to employ helpers and assistants, fix their pay, hire and discharge them at will and control their work;
  4. The furnishing of material and equipment for doing the work and paying the costs and expenses of its operation and maintenance;
  5. The independent nature of the business or occupation of the person performing the services, i.e., whether this business is one in which he generally renders services for others for a fixed remuneration;
  6. Whether or not the person rendering the service is carried on the payroll as an employee;
  7. Whether or not the employee could quit or be discharged at any time; and
  8. The extent of personal service or labor going into the work as compared to the profit or remuneration resulting to the person rendering the service by reason of the use of his equipment and material and the profit on the job accruing to him because of the work done by others whom he employs and pays.

Under these factors, certain “independent contractors” in appearance, not engaged in manual labor, may nonetheless be entitled to workers compensation benefits for their injuries.

However, it is usually fairly difficult to succeed in workers compensation court under this “independent business” approach.  For this reason, any supposed independent contractors looking to succeed under this approach really needs an experienced Louisiana workers compensation attorney to argue this case to the workers compensation judge.

Exclusive and Recurring Basis

Nonetheless, it is possible for the independent contractor to be award workers compensation benefits, particularly if the workers are working exclusively for one employer, and on a recurring basis.

Examples of independent contractors that have been award workers compensation benefits include: welders, window-washers, and other workers who may work “by the job” but do so almost exclusively for one employer, and on a recurring basis.

This is because a job which recurs frequently and without which a business could not function efficiently is probably one which is more often performed by employees or employee-like persons.

So also an important element here in detecting the presence of an independent enterprise is whether the work being performed by the independent contractor is a part of the alleged employer's business.

Services on Lump Sum Basis

Lump sum contracts are characteristically negotiated between equals, where each party represents a distinct independent business enterprise.

For this reason, a person performing work under a lump sum basis agreement will almost always be considered an independent contractor, and therefore be unable to receive workers compensation benefits from the principal/employer.

But, if the lump sum agreement does not accurately represent in reality the actual bargaining that led up to the contract, then it is fairly likely that the court will (to some extent) disregard the contract and find that the injured worker is actually an employee and thus entitled to workers compensation benefits.

For example, a builder who agrees to erect a structure according to specifications for a fixed sum may not be entitled to workers compensation, but a laborer who undertakes to cut down a tree or mow a lawn for a flat price may very well be considered employee and thus entitled to workers compensation benefits.

Effect of Employing Helpers

Typically, the fact that an injured worker employs helpers to assist with his or her work indicates that the injured worker is an independent contractor, and therefore unable to receive workers compensation benefits from the principal/employer. 

This is because usually an independent enterpriser will combine the labor of others, the furnishing of equipment, monetary capital, and overall know-how in performing his contractual service. And these actions are tell-tale signs that a separate business enterprise is present.

However, there are instances where an injured worker who employees helpers is actually considered an employee and thus entitled to workers compensation benefits.

Typically, these cases are situations involving the hauling of lumber and other commodities. In these cases the injured worker is almost always without appreciable capital (apart from the truck and some tools which he usually owns) and the rate of pay for this work is fairly well standardized. Also, the hauler's job is integrated into the principal/employer's enterprise on a fairly stable basis and thus the worker cannot really set a price that will cover the risk of injury.

So even though haulers frequently hire helpers and pay them from the per unit price he receive, Louisiana courts almost always classify haulers as employees or as independent contractors engaged in manual labor, and thus entitled to compensation.

Effect of Supplying Equipment

The fact that an injured worker supplies his or her own equipment (apart from the regular tools customarily provided by all manual laborers) is a factor indicating that he was operating a separate business enterprise, and thus will likely be regarded as an independent contractor, and therefore will not likely be able to recover workers compensation benefits from the principal/employer.

But again, there are instances where an injured worker who supplies his or her own equipment is actually considered an employee and thus entitled to workers compensation benefits.  And again, these cases typically involve hauler.

But the issue of whether an injured work supplies his or her own equipment is not going to fully decide whether workers compensation benefits  will be awarded.  Instead, Louisiana courts typically just consider this as one of many factors in cases in which the entire picture indicates that a separate business enterprise is present. 

Specialized Work or Independent Calling

If an injured worker performs work that is of a specialized nature outside the general operations of the principal/employer, then this injured worker will likely be regarded as an independent contractor, and will not likely be able to recover workers compensation benefits from the principal/employer.

This is because specialists - because of their particular training and special skills - have a bargaining power that an ordinary worker simply does not have.

Typically, a specialist will capitalize on his skill by conducting his own enterprise. Often, a specialist will negotiate on a per-job basis, will assume the risks of the job, and will provide his own helpers, equipment and materials.

And work given to specialists is usually not the type of work that is part of the regular business of the principal/employer.

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