August 5, 2016
By: Thomas E. Panzer
The High Swartz workers’ compensation defense group recently earned a favorable ruling from the Pennsylvania Commonwealth Court. In the matter of, Edwards v Epicure Home Care, Inc. (Workers’ Compensation Appeal Board), 134 A3d 1156, Pa. Cmwlth Ct 2016, the Commonwealth Court affirmed our client’s use of independent contractors in the context of a workers’ compensation claim.
The Epicure Home Care case is important for any business utilizing independent contractors as part of its business model. Use of independent contractors has been under attack and presently is viewed with some suspicion in a number of venues. Epicure Home Care affirms the ongoing viability of the independent contractor doctrine.
In Epicure, the Claimant was a personal caretaker. Epicure is a licensed home care registry, formerly an employment agency. The company screens personal caretakers and then matches them with clients in need of in-home care.
The screening process for all caretakers included reviewing applications, qualifications and social security numbers, as well as checking references and performing background checks.
As part of the screening process, the company presented to the caretaker an agreement indicating that the caretaker is not an employee of the company; that the client will pay the caretaker directly; that the caretaker is responsible for her own taxes.
Once the company matched the caretaker with the client, the caretaker negotiated the hourly rate directly with the client. The caretaker was free to work for other agencies.
The company did not direct the caretaker’s day-to-day activities; the client did. The caretaker had no need to be physically present at an Epicure facility, because all work activities took place on the client’s property.
The caretaker submitted a time sheet to the company and the company billed the client. The client paid the caretaker directly, and paid the company separately. The caretaker identified herself as “self-employed” on her personal tax return.
The caretaker was not required to wear any particular uniform bearing the company name. The company did not provide any employment benefits; no sick, vacation, or holiday pay.
The company did provide a set of performance guidelines and expectations and reserved the right to remove the caretaker from an assignment if the guidelines were not followed or the expectations were not met.
The caretaker fell at a client’s home while performing her home care duties. She filed a Pennsylvania Workers’ Compensation Claim Petition against Epicure alleging that she was an employee of Epicure and therefore was entitled to workers’ compensation benefits. Epicure denied the claim by asserting that the caretaker was an independent contractor, not an employee.
The Commonwealth Court emphasized that the existence of an employer-employee relationship is a question of law based upon the facts presented in each case. The Commonwealth Court acknowledged that no “hard and fast” rule exists to determine whether a particular relationship is employer-employee or independent contractor. The inquiry depends on multiple factors, including:
(1) control of manner the work is done; (2) responsibility for result only; (3) terms of agreement between the parties; (4) nature of the work/occupation; (5) skill required for performance; (6) whether one is engaged in a distinct occupation or business; (7) which party supplies the tools/equipment; (8) whether payment is by time or by the job; (9) whether work is part of the regular business of employer; and, (10) the right to terminate employment.
Am. Rd. Lines v. Workers’ Comp. Appeal Bd. (Royal), 39 A.3d 603, 611 (Pa.Cmwlth.2012); accord Hammermill Paper Co. v. Rust Eng’g Co., 430 Pa. 365, 243 A.2d 389, 392 (1968).
In assessing the relationship between the caretaker and Epicure Home Care, the Commonwealth Court identified factors supporting either an employer-employee relationship or an independent contractor relationship. The Court was ultimately impressed with the fact that the client, not Epicure, had the ultimate control over the caretaker. The client gave the caretaker the day-to-day instructions. The client had ultimate authority to discharge the caretaker. As a result, the Commonwealth Court concluded that the caretaker was an independent contractor.
Epicure Home Care affirms a valuable legal principle which has been subject to rather considerable scrutiny of late. The Epicure decision underscores that, under specific circumstances, the courts will affirm an independent contractor relationship. That finding has value to companies that rely on the independent contractor as part of their business model.
Caveat: while Epicure Home Care may have broad application, the principles will not apply to the construction industry. Resolution of employee versus independent contractor in the construction industry is governed by the Construction Workplace Misclassification Act, Act 72 of 2010.
For more information feel free to contact Thomas E. Panzer at (215) 345-8888 or by email at tpanzer@highswartz.com.
The information above is general: we recommend that you consult an attorney regarding your specific circumstances. The content of this information is not meant to be considered as legal advice or a substitute for legal representation.