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  • Am I Covered? (part 2 of 4): Who is considered an employee?

    Posted on June 7, 2014 by in Employment Law, NC Workers' Compensation

    When initially analyzing your workers' compensation claim, the first step your attorney will take is to determine whether you are covered by the North Carolina Workers' Compensation Act. This is the second post in a four-post series discussing who is covered by the Act. The first post described what constitutes an injury by accident or an occupational disease. You can view that post here: Am I Covered? Injuries by Accident and Occupational Diseases. The third post will discuss what types of cases fall under the jurisdiction of the North Carolina Industrial Commission and the fourth will cover what is meant by injuries arising "out of and in the course of employment."

    As a reminder. . .

    North Carolina law, like most states, limits workers’ compensation benefits to employees who: (1) have suffered an injury by accident arising out of and in the course of employment, or (2) have an occupational disease.

    So. . . you have to be an "employee" in order to qualify for workers' compensation benefits. If your employer has classified you as an independent contractor, this could add a level of complexity to your case.

    Who decides whether you're an Employee or an Independent Contractor?

    Employers have a number of incentives to classify you as an independent contractor. This imposes significant burdens on you, and your employer reaps the rewards. In addition to not being entitled to workers' compensation benefits, independent contractors are not entitled to overtime benefits, and expenses for items like equipment and supplies can be passed on to you. Also, independent contractors are typically not offered employee benefits, and the employer does not pay social security taxes.

    As you can see, it wouldn't be fair to allow the employer to decide who is an employee or an independent contractor. That is why, regardless of whether your employer says you're an independent contractor, the court will apply their own rules for determining your employment status.

    How do courts make this determination?

    In North Carolina,

    [a]n independent contractor is defined . . . as one who exercises an independent employment and contracts to do certain work according to his own judgment and method, without being subject to his employer except as to the result of his work. Where the party for whom the work is being done retains the right to control and direct the manner in which the details of the work are to be executed, however, it is universally held that the relationship of employer and employee is created.

    Youngblood v. N. State Ford Truck Sales (“Youngblood”).

    Circumstances suggestive of an individual’s status as an independent contractor include whether:

    [t]he person employed (a) is engaged in an independent business, calling, or occupation; (b) is to have the independent use of his special skill, knowledge, or training in the execution of the work; (c) is doing a specified piece of work at a fixed price or for a lump sum or upon a quantitative basis; (d) is not subject to discharge because he adopts one method of doing the work rather than another; (e) is not in the regular employ of the other contracting party; (f) is free to use such assistants as he may think proper; (g) has full control over such assistants; and (h) selects his own time.

    McCown v. Hines.

    So what does all this boil down to. . .

    The most important thing to consider is whether the purported employer retained the right to control your work. See Morales-Rodriguez v. Carolina Quality Exteriors, Inc. Although no single factor is controlling, nor must all factors be present or in agreement, there are “four principal factors generally recognized as demonstrating the right to control details of the work: (1) method of payment; (2) the furnishing of equipment; (3) direct evidence of exercise of control; and (4) the right to fire.” Youngblood.

    Next steps . . .

    If you found this information helpful, please follow our blog CarolinaCompensation™. If you are a North Carolina resident or worker and in need of legal assistance, please Contact Bowman Law PLLC for a free case evaluation, or call (336) 470-0177 to speak to Attorney Joe Bowman directly.

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