From JDSupra, Richard Reibstein discusses a unique case in New York in which an insurance company claimed that a roofing worker was an employee (and not an independent contractor) and therefore the worker’s recovery was limited to workers compensation. Usually, the worker claims they were misclassified as an independent contractor, not the business. Richard writes:
ROOFING COMPANY ASSERTS “REVERSE” IC MISCLASSIFICATION DEFENSE IN WORKERS’ COMPENSATION CLAIM. A roof installation company sued in New York for personal injuries suffered by a roofing worker for an on-the-job injury has taken an unusual litigation approach. In an odd twist, the company’s workers’ compensation carrier sought a ruling with the Workers’ Compensation Board (the Board) that the claimant was not an IC but rather was an employee, thereby limiting the worker’s remedy to the relatively modest compensation amount awarded in New York for workers’ comp injuries. Following a hearing before the Board at which claimant maintained that he was an IC and not an employee, the Workers’ Compensation Law Judge applied the presumption of employment in the New York Construction Industry Fair Play Act, concluding that claimant was an employee of the roofing company and not an IC. That decision was affirmed on an administrative appeal. The claimant then appealed to the Third Department Appellate Division. Under the Construction Industry Fair Play Act, there is a statutory presumption that a person performing services for a construction contractor shall be classified as an employee unless it is demonstrated that such person is either an IC, in accordance with a three-prong ABC test, or is a separate business entity, which can only be established by satisfying 12 specific criteria enumerated in the law. The Third Department concluded that, although the Board had properly determined that the roofing company did not satisfy the 12-factor criteria to support the separate business entity test, the Board’s decision did not address the three-part ABC test. It therefore remanded the case to the Board to determine whether application of the ABC test rebutted the presumption of an employer-employee relationship. This type of defense can, however, backfire on companies, which may be at risk of establishing in a separate legal proceeding that workers have been misclassified as ICs – and unwittingly end up owing unpaid overtime and employee benefits. Trickey v. Black River Plumbing, Heating & Air Conditioning, Inc. and Workers’ Compensation Board, No. CV-24-0287 (3d Dep’t App. Div. Sept. 25, 2025).
