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Contractors and Work Comp: Pennsylvania Court Clarifies Status

In today's economy, more and more workers are contractors rather than full-time employees with benefits. What effect does this have on workers' compensation law in Pennsylvania?

The Pennsylvania Supreme Court addressed this question in a recent case, Six L's Packing Company v. Workers' Compensation Appeal Board.

More specifically, the case focused on the issue of what happens when a business that is serving as a contractor for another company does not have workers' compensation insurance in place for its own employees. In this setting - not uncommon in the construction industry - the question is whether responsibility for paying work compensation passes on to the general contractor.

The work comp term for the general contractor in such a scenario is "statutory employer."

The Six L's case involved a company in the agriculture industry that operated farms across the U.S. The company hired various trucking companies to distribute the produce from the farms.

When a truck driver for one of the trucking companies was injured, the driver sought compensation from the trucking company and the truck owner, as well as an independent contractor for the agriculture conglomerate.

The truck owner, however, had no workers' compensation insurance coverage. The truck driver then successfully sought compensation from the agriculture conglomerate.

The Pennsylvania Supreme Court upheld this on the grounds that the driver was a statutory employee. The Six L's case therefore established that the statutory employee theory does not only apply in the construction industry, where the subcontractor is hired by the general contractor. Rather, the theory applies in other industries as well.

Source: "Six L's Packing Company v. Workers' Compensation Appeal Board," Pennsylvania Worker's Comp Case Update," Denise Johnson, Claims Journal, 7-30-12

Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit our page on the Pennsylvania workers' comp process.

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