Pennsylvania Commonwealth Court Holds that Contractor Must Enter into Written Contract with Worker Prior to Injury to Classify Injured Worker as Independent Contractor for Workers’ Compensation Purposes

Pennsylvania Commonwealth Court Holds that Contractor Must Enter into Written Contract with Worker Prior to Injury to Classify Injured Worker as Independent Contractor for Workers’ Compensation Purposes

Pursuant to Pennsylvania’s Construction Workplace Misclassification Act “an individual who performs services in the construction industry for remuneration is an independent contractor only if: (1) The individual has a written contract to perform such services[;] (2) The individual is free from control or direction over performance of such services both under the contract of service and in fact[; and] (3) As to such services, the individual customarily engaged in an independently established trade, occupation, profession or business.”  43 P.S.  933.3(a).  If a worker does not meet those requirements, he will be deemed an employee of the contractor.  While this definition of independent contractor seems relatively straight forward, Pennsylvania’s Commonwealth Court was recently tasked with determining whether the written contract requirement for an independent contractor may be satisfied by executing a written independent contractor agreement after the time of injury if all other requirements for independent contractor status appear present.

In Staron v. Workers’ Compensation Appeal Board (Farrier), the claimant responded to an advertisement by Lee’s Metal Roof Coatings and Painting (“Lee’s”) looking for a painter.  The claimant informed Lee’s that he had 20 years of experience in painting and roof work, that he worked as a self-employed painter who usually did work on his own, and that he owned his own truck, tools, and some equipment.  Lee’s agreed to pay the claimant $100 per day but also told the claimant that he would “need to sign a document in order to work” for Lee’s.  Thereafter, without signing any document, the claimant started working at a Lee’s jobsite using his own brushes, caulk gun, painter pans and knee pads and with very little direction from Lee’s.  On his fourth day of work, the claimant slipped and fell off the roof of the project, injuring himself.  Upon his release from the hospital, Lee’s presented the claimant with a written independent contractor agreement, which the claimant freely signed.  Despite signing the agreement, the claimant filed for workers’ compensation benefits as an employee of Lee’s.  The Workers’ Compensation Judge granted the claimant benefits, and the Workers’ Compensation Board affirmed the decision.

On appeal, the Commonwealth Court determined that the claimant did not qualify as an independent contractor because there was no written independent contractor agreement at the time that claimant was injured.  The Commonwealth Court found that the independent contractor agreement the claimant signed upon release from the hospital had no import because, “a written contract for services did not exist at the time of Claimant’s injury.”

Thus, the takeaway point from Staron is that an independent contractor agreement must be signed prior to the time of injury for it to have any effect in establishing an independent contractor relationship for workers’ compensation purposes.  Accordingly, because one never knows when a workplace injury will occur, best practice is to have an independent contractor sign an independent contract agreement before she/he begins working at a job site.