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New Jersey Workers’ Compensation: Employee vs. Contractor

New Jersey Workers' Compensation Employee vs. ContractorNew Jersey Workers’ Compensation: Employee vs. Contractor

In a recent New Jersey Workers’ Compensation case, licensed horse owner and trainer Randolph Perry sued Robert Horowitz Stable for New Jersey Workers’ Compensation benefits, alleging that he was an employee of the stable due to the control that Horowitz had over his duties. However, the Appellate Division found that Perry was running his own business, with the absence of a W-2 or 1099, and rendered him an independent contractor, and therefore not eligible for New Jersey Workers’ Compensation benefits from the Robert Horowitz Stable.

Incidences such as this one raise the question; what determines an employee from an independent contractor? Under Workers’ Compensation Law in most states, most individuals who are providing services to a for-profit business will be deemed an employee of that business, and therefore must be covered by the employer for Workers’ Compensation insurance. The actual term “employee,” for Workers’ Compensation purposes, typically includes day labor, leased employees, borrowed employees, part-time employees and unpaid volunteers.

So what is an independent contractor? Unfortunately, there is no set definition of the term “independent contractor” that is widely accepted in all states. Due to this, if there is any question of what a person qualifies as, they must look to the interpretations of the courts and enforcement agencies in their state to decide if in a particular situation a worker is an employee or independent contractor. The most significant factor in determining one’s status as an independent contractor or employee is whether the employer they are serving has control or the right to control the worker both as to the work done and the manner and means in which the job is performed. Depending on the specific job or issue, the following are additional details to determine one’s status as an employee or independent contractor:

  • Whether the person performing the job is engaged in an occupation or business distinct from that of the employer.
  • Whether or not the work is part of the regular business of the principal or alleged employer.
  • Whether the worker’s investment in the equipment or materials required by his or her task or his or her employment of helpers.
  • Whether the service rendered requires a special skill.

These are just some of the factors that would help determine whether a worker is an employee or an independent contractor. At Associated Specialty Insurance Agency, Inc. (ASIA) we understand the unique New Jersey Workers’ Compensation needs of many targeted industries, including Artisan Contractors. Please contact us today for more information at (866) 679-7457.

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