An injured worker can collect workers’ compensation benefits despite the fact his employer insisted all of its employees were independent contractors.
The West Virginia Supreme Court of Appeals found that since the worker was paid hourly, used tools owned by the employer and received instruction on what jobs to complete from the employer, he was an employee for workers’ compensation purposes.
Company exempted from workers’ comp insurance
Steven Bailey was a laborer for Green Tek Building Solutions, a West Virginia company owned and operated by Roger Ellis.
In 2013, Ellis had applied for, and received, an exemption from the West Virginia Office of the Insurance Commissioner stating the company didn’t need to maintain workers’ compensation insurance since it only used subcontractors. This exemption would last until May 28, 2014, or “until circumstances changed.”
Bailey was hired by Green Tek in 2015 as a 1099 employee. If he had questions about work assignments or paychecks, he contacted Ellis for information. Ellis paid Bailey with paychecks that read, “subcontractor labor,” in the memo line.
On Feb. 13, 2018, a fluorescent light fell from the ceiling and struck Bailey’s left forearm while he was working at a jobsite in Pennsylvania. The incident resulted in an open wound with damaged tendons. Bailey filed a workers’ compensation claim on Feb. 20, 2018.
Owner says he’ll pay medical bills himself
A claims administrator held the claim compensable for an open wound of the left forearm with tendon involvement and granted temporary total disability benefits starting February 13, 2018. Green Tek contested the claim, arguing it was exempt from carrying workers’ compensation insurance.
In a deposition, Bailey testified he:
- was employed by Green Tek and its owner, Ellis
- never applied for an independent contractor license
- was paid by the hour
- was required to complete a daily time card
- received instruction from Ellis or Chris McBride, a foreman
- was told where to work by either Ellis or co-workers, and
- used only a few of his own tools, with the majority of tools being provided by Green Tek.
Bailey stated that when he was transported to the hospital, Ellis arrived and told him he didn’t have workers’ compensation insurance. Instead, Ellis said he’d cover the medical bills himself.
‘He occasionally called for jobs’
Ellis testified in a deposition that he:
- was the owner of Green Tek
- worked with the men he hired, 99% of the time
- mostly paid by the hour but sometimes by the job
- had each worker complete a W-9 and provided them with a 1099 each year
- had each worker submit their hours to him
- paid workers by check
- allowed workers to make their own hours and decide their own break times
- had workers bring their own tools but would let them borrow his if needed, and
- didn’t prevent workers from taking other jobs.
Ellis stated that he’d informed Bailey before his first job that he had to be a contractor and had him fill out a W-9. He said Bailey didn’t work regularly for Green Tek and just occasionally called for jobs.
Contractor confusion at Pennsylvania jobsite
For the Pennsylvania job where Bailey was injured, Ellis stated he was called by Cocca Development who asked him to bring as many workers as he could. There was no written contract between Cocca and Green Tek. Ellis called Bailey, among others, and offered him the job. He said he told Bailey that Cocca would pay for their hotel rooms and that all of them would be considered contractors for that company.
When they arrived, they were given some general instructions on what to do but weren’t monitored as they worked. Ellis said they all came and went as they pleased. He stated they all used their own tools but that Bailey forgot a few of his and had to borrow a few from Ellis.
While the workers all filled out their own time sheets for Cocca, Ellis said the company decided to pay Ellis and have him pay the workers he brought with him. This was allegedly because he already had direct deposit set up with Cocca Development, having worked for them before.
Ellis also explained that Green Tek no longer existed since his license was revoked on Nov. 1, 2016. He stated that he’d never provided workers’ compensation for people he hired to do jobs. He said it was his understanding that he wasn’t required to have workers’ compensation insurance for his business.
‘Difficult to conclude he was anything other than an employee’
The West Virginia Office of Judges affirmed the claims administrator’s decision granting benefits, finding that Bailey was an employee of Green Tek when he was injured. The Office of Judges found that Bailey:
- had no special skills or tools
- was a manual laborer, and
- was paid hourly by Green Tek.
It was difficult to conclude Bailey was anything other than an employee of Green Tek, the Office of Judges stated in its decision. The decision also noted that Ellis employed a part-time office helper who was also labeled as an independent contractor, and that Ellis seemed to have classified everyone who worked for him as independent contractors no matter what position they held.
On appeal with the West Virginia Supreme Court of Appeals, the court agreed with the Office of Judges, finding the evidence supported Bailey was a Green Tek employee despite Ellis’ attempt to classify all of his employees as independent contractors.