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Pennsylvania Court Rules Subcontractor Has Statutory Employer

In a recent unanimous decision, the Pennsylvania Supreme Court ruled a subcontractor was entitled to workers' compensation benefits from the business who hired him. This is a "game-changing" decision, giving many more contractors the right to claim workers comp benefits if they are injured on the job.

In the case, a truck driver was hired as a subcontractor (not an employee) by a Pennsylvania tomato grower to deliver produce. The driver was injured in an auto accident while transporting tomatoes from a Pennsylvania warehouse to a Maryland processing facility.

The truck driver argued that the company who hired him to deliver produce should be responsible for his workers' compensation benefits. He said the Legislature intended to "create a class of statutory employers" broader than the traditional relationship of premises-based contractors and subcontractors in situations such as construction sites.

Agreeing with all the previous tribunals to hear the case, the Pennsylvania Supreme Court awarded benefits to the truck driver. The court ruled the tomato grower is "secondarily liable" for paying the injured subcontractor's benefits. "We do recognize a degree of ambiguity inherent in the overall scheme for statutory employer liability, arising out of differences in the definitions for 'contractor' as used in various provisions of the [compensation act]," explained Justice Saylor.

The ruling settles some of the ambiguity surrounding the Pennsylvania's Workers' Compensation Act's treatment of statutory employer status. The court ruled that when a company contracts out work which is a "regular or recurrent part of their business" they must provide workers' compensation insurance to those workers.

Source: post-gazette.com, "Contractor's hirer found to be statutory employer," Ben Present, June 11, 2012.

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