Employment Law Daily Massachusetts independent contractor law does not determine who is ‘employee’ for workers’ comp benefits
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Monday, May 21, 2018

Massachusetts independent contractor law does not determine who is ‘employee’ for workers’ comp benefits

By Lorene D. Park, J.D.

The Massachusetts’ independent contractor statute, G. L. c. 149, § 148B, does not determine whether an injured worker is an “employee” for the purpose of workers’ comp benefits under G. L. c. 152, ruled the Massachusetts Supreme Judicial Court. Consequently, the reviewing board of the Department of Industrial Accidents correctly applied the workers’ comp statute’s definition to decide if the claimant was an employee, and she was properly classified as an independent contractor. Concurring, Justice Gants wrote separately to highlight the problem inherent in having different tests for “employee” status under different state employment laws (Ives Camargo’s Case, May 10, 2018, Kafker, S.).

Newspaper delivery. Since 2001, the claimant was a delivery agent for Publishers Circulation Fulfillment (PCF), which acts as a middleman for publishers, delivering newspapers through agents. The claimant signed various contracts over the years that identified her as an independent contractor. As part of her contract, she was given routes and a list of customers, but she used her own vehicle and could make deliveries at any time and in any order she wished, provided they were done by 6 A.M. on weekdays and 8 A.M. on weekends. She was paid for each newspaper delivered and paid a weekly stipend when she elected to redeliver newspapers to customers who did not receive a scheduled delivery. She was allowed to hire assistants or to subcontract deliveries; an option she exercised. And given the non-exclusivity of her contract with PCF, she could deliver newspapers or other items for other businesses. She also purchased and collected independent contractor work insurance and filed taxes as an independent contractor.

Work injuries. In September 2010, the claimant was loading papers from PCF into her vehicle when she fell off a ramp and hurt her right knee and right hand. She reported the injury to PCF but did not seek medical treatment and finished her work for PCF that day. She reported a second injury in January 2011 after slipping on ice while delivering papers and injuring her right leg. After the second injury, she was hospitalized and had surgeries on her right knee and right hand. She was fired the summer of 2012.

Workers’ comp denied. She filed a claim for workers’ compensation benefits in 2012 and the insurer objected. An administrative law judge (ALJ) issued an order directing the insurer to pay temporary total incapacity benefits and the insurer appealed. After a hearing, the ALJ concluded the claimant was an independent contractor and therefore not entitled to workers’ comp benefits.

Affirming, the reviewing board also concluded that the claimant was an independent contractor based on the definition of “employee” contained in the workers’ comp statute, as articulated in the 12-part test from MacTavish v. O’Connor Lumber Co. and Whitman’s Case, rather than the definition of “employee” found in the independent contractor statute, Chapter 149, Section 148B.

Relevant statutory provisions. Also affirming, the Massachusetts Supreme Court reviewed the relevant statutory text and history. The workers’ comp statute, General Laws c. 152, requires employers to provide workers’ compensation to employees who are injured within the scope of their employment. It applies to “employees,” defined in Section 1 as “every person in the service of another under any contract of hire, express or implied, oral or written,” with certain exceptions not relevant to this opinion.

The independent contractor statute, General Laws c. 149, provides specific benefits and protections to employees, including how often an employee must be paid, when an employee must be notified of wage deductions, etc. The two key provisions in Chapter 149, Section 148B (a) and (d) state: “(a) For the purpose of [G. L. cc. 149 & 151], an individual performing any service, except as authorized under this chapter, shall be considered to be an employee under those chapters unless: (1) the individual is free from control and direction…. (d)… Whoever fails to properly classify an individual as an employee according to this section and in so doing violates [G. L. c. 152] shall be punished as provided in [G. L. c. 152, § 14,] and shall be subject to all of the civil remedies, including debarment, provided in [G. L. c. 149, § 27C].”

Definition of “employee” for workers’ comp purposes. The claimant argued that the reference to G. L. c. 152 in subsection (d) incorporates the three-part independent contractor test set out in c. 149, § 148B, so the definition of “employee” in c. 149, § 148B (a), should be used in lieu of the definition of “employee” found in the workers’ compensation statute, c. 152, § 1, and the MacTavish-Whitman factors.

Disagreeing, the state high court explained that it needed to look no further than the plain and unambiguous language in the independent contractor statute c. 149, § 148B subsection (a), which states that Section 148B applies “for the purpose of” chapters 149 and 151. This expressed the legislature’s intent to limit the applicability of the independent contractor statute to chapters 149 and 151. Thus, while § 148B subsection (d) contained an isolated cross-reference to c. 152, it did not apply to c. 152 in its entirety or change the definition of “employee” for purposes of a workers’ comp claim. (The court noted that the reviewing board clarified the purpose of the cross-reference to c. 152, which addresses expanded penalties for misclassifying workers but does not address whether an individual is an employee for purposes of workers’ comp benefits).

Claimant was an independent contractor. Based on the foregoing, the definition of “employee” in the workers’ compensation statute, c.152 Section 1 governed the claimant’s employment status here and the MacTavish-Whitman factors provided the appropriate test. In applying those factors, the ALJ properly concluded, and the reviewing board properly affirmed, that the claimant was an independent contractor.

Concurring opinion. Joined by Justices Lowy and Budd, Justice Gants wrote a concurring opinion to highlight problems inherent in having different standards for determining employee status under various laws and to suggest “it is time to confront the problems that arise from this complex statutory scheme, especially to workers.” Justice Gants noted Maine adopted a uniform standard under its unemployment insurance, workers’ comp, and other employment laws. He encouraged the Massachusetts legislature also to take steps to address the issue.

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