Who is an "Employee" Under Workers’ Compensation Law?

The New York State Workers’ Compensation Board (WCB) has specific guidelines which are used to determine who is considered an employee under New York State Workers’ Compensation Law (WCL). Under this law, all “employees” must be covered under a workers’ compensation insurance policy by his or her employer in order to be protected and receive benefits should they be involved in an accident on the job. The Workers’ Compensation Board defines an employee as an individual who provides services to a for-profit business. If the services provided by an individual do not meet the definition of an “employee” under workers’ compensation law, then the individual may be considered an independent contractor.

Employees will usually fall under the categories of day laborers, leased employees, borrowed employees, part-time employees, unpaid volunteers (including family members) and most subcontractors. There are grey areas however, and other factors may be relative in determining whether or not an individual is considered an employee under the law.

A workers’ compensation judge will make the final decision on whether or not an individual is an employee or independent contractor at a hearing due to a work-related accident or illness under the following workers compensation law guidelines.

Who controls the work performed? – A person or organization who directs the individual to how the work is to be completed indicates that the job is being performed by an employee. A person may be an independent contractor if he/she controls the way a task will be completed or if he/she works under his/her own operating license.

Is the nature of the work the same as employer? – If an individual performs work that is also the same type of work as the employer , then he/she may be considered an employee. For example, if a commercial painting company hires an individual to paint buildings, then that person would be considered an employee. On the other hand, if an auto mechanic is hired to repair a vehicle for a limousine company then he would be considered an independent contractor.

How does the employer pay the individual? – If a business has an individual on an hourly, weekly, monthly, (etc.) payment schedule, or the employer withholds taxes and other benefits such as unemployment insurance or a 401K, then that suggests that the individual is an employee. If someone is paid through a 1099 or W-2, neither is considered to be a factor in determining whether or not the person is an employee under workers’ compensation law. Payment made for performance of the task as a whole may indicate the task is being done by an independent contractor.

Is the equipment and material provided by the employer? – If a business provides the equipment and materials needed to perform the job task, then the individual will be considered an employee. For example, a bricklayer supplies all the necessary tools for an individual to complete the job.

Does the employer have the right to hire and fire individual? – If a business has the right to hire or fire an individual that is performing the work, then that suggests that the person is an employee. Obviously, an independent contractor can be terminated from his contract if the work performed is not up to the standards of the hiring business, however, as mentioned above, under workers’ compensation law, an independent contractor has control over how the work is to be performed and completed.

Should you need more information or help in filing a workers’ compensation claim, contact us toll-free at 1-877- NY-DBLAW for a free claim evaluation.

Angela Luongo, a Paralegal at Turley Redmond, & Rosasco, contributed to the writing of this post.