When is an “Employee” an “Employee” for PA Workers’ Compensation Purposes?

Most employees in PA are covered by the Pennsylvania Workers’ Compensation Act.  This is a topic that has been mentioned previously in this blog.  However, that thought begs the question – who is actually an “employee”?  This can be a complicated topic and analysis, where one must differentiate the “employee” from the “independent contractor” (the latter not covered by the PA Workers’ Compensation Act).  Ultimately, this is a determination based upon the facts in each specific case.  A recent decision from the Commonwealth Court of PA does remind us of the significant factors.

Suppose you go to work for a company.  You sign an agreement, which says that you are an independent contractor.  You agree that taxes will not be withheld.  You are paid by the job, not by your time.  You have the right to decline job assignments.  You are not required to wear your employer’s uniform at work.  Your boss is not even on location when you are doing your job.  So, are you an employee?  Well, that would depend!  Though these are some of the factors to be examined, there are certainly others.

In Berkebile Towing and Recovery v. Workers’ Compensation Appeal Board  (Harr, State Workers’ Insurance Fund and Uninsured Employers Guaranty Fund), the answer was yes.  Some other facts, as found by the Workers’ Compensation Judge (WCJ), would be helpful to understanding the decision:

– The tow truck given to the injured worker bore the employer name;

– There was no written agreement for the injured worker to lease or rent the truck

– The injured worker did not pay for gas, insurance or maintenance

– Employer fully equipped the trucks with the necessary tools

– The injured worker could not use the truck for another other job

– The injured worker could not lend the truck to another person to do a job

– Employer set the price to be charged

– Checks given to the injured worker by the customer were made payable to the employer

Ultimately, the WCJ concluded that these facts were more indicative of an employment relationship, than one with an independent contractor.  Interestingly, the WCJ gave little weight to the agreement which was signed, purportedly calling the injured worker an “independent contractor,” calling it, “little more than a pretext for Berkebile Towing to avoid the obligations of having employees.”  The most critical factor, said the WCJ, was Employer’s “right of control.”  Indeed, the owner of Employer testified, “I guess I could do anything I wanted to since it’s my stuff.”

The decision of the WCJ was consistent with a previous tow truck driver case, Sarver Towing v. Workers’ Compensation Appeal Board (Bowser), decided by the Commonwealth Court of PA in 1999 (though the injured worker in that case was actually hurt lifting a computer in his employer’s shop, rather than on a tow job). The Court in Sarver found the tow truck driver to be an “employee.”  This case was relied upon by the WCJ in the instant case, wherein the WCJ granted the Claim Petition and awarded workers’ comp benefits.

On appeal in this case, the decision of the WCJ was affirmed by the Workers’ Compensation Appeal Board (WCAB), and then the Commonwealth Court of Pennsylvania.  Specifically, the Court observed:

“We agree with the WCJ and the Board that under the facts as found by the WCJ, Berkebile Towing’s ownership and control over the availability and use of its trucks favor finding an employer-employee relationship with Harr. As in Sarver, the level of control that Berkebile Towing could exercise by allowing or restricting the drivers’ use of the trucks was substantial and significant.”

Interestingly, there was another previous case, Baykhanov v. Workers’ Compensation Appeal Board (Onixe Express), decided by Commonwealth Court of PA in 2018, which found the injured worker to be an independent contractor on similar facts.  The Court in Harr, however, observed that Baykhanov was “a divided and unreported memorandum opinion,” as opposed to Sarver, which was unanimous and reported.  This reinforces what we have mentioned about the relative value of reported versus unreported cases.

Ultimately, I think we can safely say that the determination of an employment relationship will depend primarily on the facts present in each case.  The humanitarian nature of the PA Workers’ Compensation Act does (or should) encourage a WCJ to find an employment relationship, with all other things being equal.  The fact that a case often lives or dies with the litigation before the WCJ highlights the importance of selecting the right workers’ compensation attorney.