From JDSupra, Barret Albritton discusses two unique questions about workers compensation including the question about whether a worker classified as an independent contractor might be covered under for workers compensation benefits. Barret writes:
As summertime approaches, employers are usually faced with unique questions from a workers’ compensation standpoint. Questions often arise in summer that are rarely posed during the winter months. Two of the most prominent questions are: What defines a worker as an independent contractor versus an employee, and are benefits provided if an employee is injured during an employer-sponsored recreational activity?
Independent Contractor Versus Employee
The most common spring and summer seasonal question involves the ever-present independent contractor versus employee conundrum. As the warmer weather returns, so does an increase in workforce demands across many industries but most widely seen in construction. Employers are forced to bring on additional workers to meet demands.
Prior to January 1, 2020, the courts in Tennessee followed the “ABC” test to answer the question of whether someone injured on the job was an employee versus an independent contractor. Those factors included:
(1) control (i.e., who controls the when, where, and how the worker conducts the work);
(2) the right of termination;
(3) method of payment;
(4) worker’s freedom to hire and fire helpers;
(5) furnishing of tools and equipment;
(6) control of work hours; and
(7) the worker’s freedom to offer services to other entities. (T.C.A. § 50-6-102(11)).
The right of control has always been the central and primary factor in answering the independent contractor versus employee question; however, the existence of such right was found to be sufficient to establish this factor. In June 2019, however, the court adopted what is essentially the same test used by the Internal Revenue Service, using a total of 20 factors to make this determination. Unlike previously, the new factors are theoretically designed to be more employer-friendly, with no one factor being determinative. Instead, the factors are analyzed in a “totality of the circumstances” manner. This is significant to keep in mind as you are faced with this question during the busy summer months and even around the December holidays as employers hire seasonal help.
Recreational Activity Versus Employment-Related Activity
Like the employee versus independent contractor question above, the question of whether an employee who is injured in an “employer-sponsored” recreational event is entitled to workers’ compensation becomes widespread during the summer months. As employees get involved in softball leagues, kickball leagues, bowling leagues, and even the dreaded mud runs, employers are often asked to cover injuries occurring on the competitive field of play.
The determinative questions to be answered are whether the injury occurred “by accident” and did the injury “arise primarily out of and in the course and scope of the employment without regard to fault as to fault as a cause of the injury.” (See T.C.A. 506-6-103(a)). Historically, courts have held that an employee’s injury arising out of voluntary participation in recreational activities such as the aforementioned are not covered by workers’ compensation. Recently, the courts created four exceptions to this rule, making this question much less distinct. An injury arising from voluntary participation in a recreational event will be compensable if:
(1) participation was expressly OR impliedly required by the employer;
(2) participation produced a direct benefit to the employer (beyond improvement to employee’s health or morale);
(3) participation was during employee’s normal work hours; OR
(4) injury occurred due to an unsafe condition using facilities designated furnished or maintained by the employer. (Employer must have actual knowledge of the unsafe condition.)
Of course, the first factor begs the question: what does “impliedly required” mean? To answer this, the two main factors to consider are the relationship between the employee and the person requesting the employee’s participation and whether the employee would suffer any adverse employment decision for not participating. In Pope v. Nebco of Cleveland, an employee was injured during a “company-sponsored” mud run. The court ruled quickly that the employer derived no benefit from the race and did not provide the facilities upon which the employee was injured. Thus, the court, in analyzing the exceptions, was left to make a determination as to whether the participation was “impliedly required” and ruled that because the employee had been repeatedly asked to participate by a co-worker, as opposed to a boss or supervisor, and because the race occurred outside of normal hours, the employee’s participation was 100 percent voluntary. This resulted in a finding in favor of the employer, and no workers’ compensation benefits were awarded.