Independent Contractor vs. Employee – The Difference Matters

The labor economy is more complex now than it has ever been. There are subtle legal and technical distinctions separating different categories of work in a manner that suits the changing employment landscape, but which also generates confusion for those who are unsure of their employment status. This is a crucial issue in the consideration of workers’ compensation when someone is working in some capacity as an independent contractor.

Workers’ Compensation Insurance

The state of Pennsylvania requires employers to carry workers’ compensation insurance, regardless of the number of employees, unless all employees are in highly specific positions, including, but not limited to the following:

• Federal employees
• Longshoremen
• Railroad workers
• Casual workers (i.e., those employed irregularly and for tasks not associated with employer’s usual business)
• Licensed real estate agents or associate brokers attached to a licensed real estate broker and working on commission only

Determining Employee vs. Independent Contractor Status

Although the law is fairly clear on the conditions in which an employer must carry workers’ compensation insurance, it is less successful in articulating who qualifies as an “employee” when there is a dispute due to an injury suffered while someone is working as an “independent contractor.” There have been cases before the Commonwealth Court that have created some precedent and vague guidelines for deciding these arguments, but they are not definitive, nor have they been enacted through new legislation.

One common thread in the cases is the prevailing tendency toward inclusion, which is to say that simply calling someone an “independent contractor” does not preclude an employer from workers’ compensation liability for that individual.

Generally, if an employer has ongoing input and oversight of an independent contractor, she will be deemed an employee, and therefore eligible to receive workers’ compensation. However, if the independent contractor has full authority over the manner in which work is performed and is only responsible for the end result, she will be designated an independent contractor, ineligible for the benefits.

Contact Us

If you were hurt while on the job, contact Philadelphia workers’ compensation attorneys of Lowenthal & Abrams, P.C., at 215-238-1130 to discuss your unique situation.