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November 11, 2009
When Is an Independent Contractor an Employee?

New Jersey’s Workers’ Compensation law covers injuries that occur while on the job. But the definition of just what "on the job" means can be a point of contention. Unfortunately, as I’ve seen for myself, it can take a tragic accident to determine the line between employee and independent contractor.

The case I’m thinking about involved a Central Jersey tractor-trailer driver who was stopped for a routine traffic check at a tollbooth on the New Jersey Thruway. He was waved through just as one of the state troopers slipped in front of his rear wheel and was crushed.

The driver was devastated, so much so that he became depressed and ultimately suffered a total psychiatric disability. When he applied for Workers’ Compensation, however, the company he drove for balked. Its argument: The driver owned his own tractor and thus was an independent contractor.

What this position ignored was that for the past fourteen years the driver had received daily assignments from the trucking company. For fourteen years he was told where to go, when to go, and what to do with his cargo when he got there.

It was clear that the driver’s employer controlled his working life. The Judge in the Workers’ Compensation Court applied what’s sometimes known as the "control test." This says, in simple terms, that if an employer controls where, when, and what an individual does, then that individual is by definition an employee.

The driver in this case at first received temporary total disability but ultimately was granted permanent total disability.

The Judge in this case made the right decision. The term "employee" is to be defined liberally in order to bring as many cases as possible within the scope of the Workers’ Compensation Act, so the cost of work accidents may be passed along as part of the cost of the product or service provided.

Workers’ Comp disturbs some people, who see it as a form of welfare. Actually, Workers’ Compensation is a form of social legislation intended to protect all employees who are injured on the job. — Frank Hlavenka

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