Most Workers Are Covered in Louisiana
Louisiana law requires employers to provide workers' compensation insurance coverage, even if they have only one employee.
In general, an employee in Louisiana is covered for workers compensation purposes from the day they start on a job. So even if an employee is injured during his or her training period, the employee is entitled to full workers compensation benefits. The injured employee would still have all his or her medical bills paid, and his or her lost wages would simply be calculated based on the expected earnings for his or her position.
Employees in Louisiana are covered under workers compensation irregardless if they are full-time, part-time, seasonal workers or minors. So part-time employees will have all their medical bills paid. Since lost wages in workers compensation are calculated based on the employee's earnings, income replacement benefits for part-time employees will be affected by the number of hours the employee typically works per week.
There are some limited exceptions in Louisiana workers compensation laws, wherein certain employees are not covered for workers compensation purposes. For example, domestic employees, most real estate salespersons, uncompensated officers and directors of certain non-profit organizations, and public officials are specifically exempted. Most volunteer workers would also not be entitled to benefits.
Employees of Subcontractors
Louisiana also makes specific provision for liability of principals and subcontractors for job-related injuries of workers on these jobs. That means that contractors need to make their subcontractors have workers compensation insurance, or they will have to pay for it.
So except in the rare employment situations where a principal undertakes the liability of workers compensation coverage for all employees willingly, Louisiana principles generally require that all subcontractors provide proof of attainment of workers compensation liability insurance to cover all of their employees.
Either way, the employee is covered.
Independent contractors are not usually eligible for workers compensation benefits in Louisiana. This is because many independent contractors are self-employed small business owners who do work for several or many businesses at the same time.
However, there are instances where subcontractors and some independent contractors can be found to be employees when they are involved in the pursuit of the employer's trade, business or occupation or when their job is found to include the performance of substantial manual labor.
So it really does matter how an employee is classified - as either an employee or an independent contractor - and sadly employers often attempt to misclassify the worker in order to escape workers compensation liability.
Is the Injured Worker An Employee or An Independent Contractor?
As noted above, employees are eligible for Louisiana workers compensation while independent contractors are not usually eligible for workers compensation benefits in Louisiana. Typically, it is assumed that workers begin with an assumption that they are employees, and not independent contractors, unless there is particular evidence which shows otherwise.
So who decides if you are an employee or an independent contractor? Surprisingly, the employer cannot determine on its own if a worker is an employee or an independent contractor. Instead, this classification is a legal determination, which will most likely be determined by a workers compensation judge, unless all the parties are in full agreement.
To determine whether an injured worker is an employee or an independent contractor, a fact-specific determination will often be made based on the specific circumstances surrounding the nature of the working relationship.
Typically, an employee:
- Receives a salary or a fixed hourly rate;
- Performs work on an ongoing basis;
- Has taxes taken out of his or her paycheck;
- Receives employer-provided benefits such as health insurance or a retirement plan;
- Has an exclusive working relationship with a single business;
- Is provided with the tools and supplies required to do the job;
- Is provided with training on how to perform the job; and
- Has a supervisor who decides the specifics of the work to be done.
In comparison, typically, an independent contractor:
- Is paid per completion of a particular project, or on commission;
- Performs work that is temporary in nature;
- Does not have taxes taken out of his or her paycheck;
- Does not receive employer-provided benefits such as health insurance or a retirement plan;
- Regularly works with more than one business at a time;
- Provides his or her own tools and supplies;
- Does not need training because he or she already has the necessary skills to do the work; and
- Works with little or no supervision.
How to Prove Misclassification of A Worker As An Independent Contractor
If an employer is wrongly classifying a worker as an independent contractor instead of an employee, which would eliminate the worker's right to workers compensation benefits in Louisiana, the worker will need to submit evidence that he is in fact an employee. It is almost always best to have an experienced Louisiana workers compensation attorney submit this evidence, because it will likely end up in front of a workers compensation judge in court.
This evidence of employee status, usually either in the form of documents or testimony, should be used to establish three important elements regarding the employment relationship:
- Financial control;
- Behavioral control; and
- Nature of the work relationship.
Regarding financial control, the employer in an employee arrangement maintains control over how the employee is paid, and control over how the related supplies and tools are purchased.
Regarding behavioral control, the employer in an employee arrangement maintains control over when the employee works, where the employee works, and how the employee does the job.
Regarding the nature of the work relationship, in an employee arrangement, the work relationship is ongoing, and not temporary.
Evidence relating to financial control, behavioral control, and the nature of your relationship is looked at as a whole. No one factor is considered more important than the others in determining if you are an employee or an independent contractor.
GAME ON: The Crackdown on the Misclassification of Workers as Independent Contractors
In 2017, the Louisiana Department of Revenue, the Louisiana Workforce Commission, and the Louisiana Office of Workers Compensation joined together to create the GAME ON (Government Against Misclassified Employees Operational Network) Task Force in order to combat illegal employee misclassification and the related failure to withhold payroll taxes.
Under the GAME ON Task Force, employers who willfully misclassify workers can be fined $1,000 per offense and be required to provide misclassified workers with their required benefits. The GAME ON Task Force can also seek to collect the tax from the employer, whose failure to withhold payroll taxes in accordance with the law renders the employer responsible for those taxes. The GAME ON Task Force can collect interest, delinquent payment penalties, and delinquent withholding penalties. The GAME ON Task Force can even imprison employers who misclassify large numbers of employees.