Is a construction site accident a workers comp claim or a personal injury lawsuit?

Workers’ compensation cases involving construction injuries are complex matters, and attorneys on both the claimants’ and defendants’ side need to know the ins and outs of the Construction Workplace Misclassification Act (CWMA)

No individual may be classified as an independent contractor unless they have a written contract to perform construction services, are free from control and direction over the performance of the work, and customarily engaged in an independently established trade, occupation, profession or business.  The CWMA further requires that an individual possess the tools needed to perform the work, a proprietary interest in their business, and liability insurance of at least $50,000, among other independent contractor requirements.  In other words, the CWMA protects injured construction workers by recognizing them as employees to be covered under the employers’ insurance or the Uninsured Employers’ Guarantee Fund (UEGF), unless they meet all of the requirements of an independent contractor.

“Before the CWMA went in to effect, courts used a traditional common law control test to determine if there was an employment relationship,” said Cummings, “and many employers were misclassifying employees as independent contractors in order to skirt the system and avoid paying workers’ compensation.” The act only applies to the construction field, which is important because of the severity of construction injuries. “Construction workers put themselves at a huge risk doing things like demolition, climbing onto roofs and ladders, and they need the protection of statutory employment,” said Carlson. When determining whether an individual fits the definition of a construction worker and whether the CWMA applies, Carlson said attorneys need to focus first on what type of work and services the injured workerwas performing. Next, it is important to determine who the employer is. “Your client might not speak English, or might have been hired through a friend whose last name they don’t know, or the employer might not have a corporate name – you might need to hire a private investigator to figure out who exactly the employer is before you put a case into suit,” Carlson said. “It is much easier now to determine if an employer has insurance. If there is no insurance, claimants’ attorneys must put the UEGF on notice within 45 days of finding that out,” Carlson said.

Carlson also noted that counseling and prepping your client is of utmost importance in these complex cases. “Allow adequate time to prep for questions regarding why the individual is an employee and not an independent contractor – you might have to deal issues involving residency, undocumented workers, and average weekly wage as well,” he said.

The court made it clear in the recent D&R Construction vs. WCAB case that the CWMA is not retroactive and only applies to construction injuries that occurred on or after Feb. 10, 2011, the effective date. Another relevant case, L&I vs. WCAB (Appeal of Lin)was just argued before the PA Supreme Court on March 6.  In that case, the employer was a Chinese restaurant that closed for remodeling when one of the construction workers was severely injured.  The employer argued that the CWMA did not apply because it was a restaurant and not in the business of construction.  However, Carlson said, “when you look at the four corners of the CWMA itself, I don’t see anything that talks about the nature of the employer’s business – the focus is on what the injured worker was doing and the circumstances around his construction job.”

“Know How to Clarify Who’s a Contractor, Who’s Not” by Elisa Advani was originally published in the May 2018 issue of Philadelphia Bar Reporter (Vol. 47, No. 5). Reprinted with permission.