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Fuller v. L&L Floor Covering

Claim Pet. 97-010241 (D.O.L. Div. of Worker's Comp. 2000)

WORKERS’ COMPENSATION—Because a carpet installer in his own business for 20 years then exclusively took installation assignments from another company for three weeks, it, the installer, was found to be an employee of that other company for purposes of the Workers’ Compensation Act.

A business operation was run from a warehouse location, and its sole business was to solicit carpet installation jobs from retailers and arrange installation of the carpet in customers’ homes. It was not in the business of selling carpet, but simply installing it. It secured installers by placing advertisements in the newspaper, and soliciting independent contractors to do the installation work. The business would request proof of workers’ compensation insurance from the installer, and once the installer provided the appropriate documentation, the business gave them daily jobs and paid them by the yard of carpet installed. One such installer had been in the business of installing carpets for about twenty years and had its own business name and used his own truck and tools. That business owner responded to the advertisement and, at the installation company’s request, obtained workers’ compensation insurance. He worked exclusively for the installation company for about three weeks. He arrived early each morning, picked up the workload, and then loaded carpet onto his truck, with or without the installation company’s employees. The installer then arranged the time of installation with the customers, and then went to the customer’s premises and laid the carpet using his own tools. Occasionally the installer had its own assistant help, if the job entailed moving a lot of furniture. At the end of each week, the installation company would issue a check to the installer based upon the number of yards installed that week. During the course of one job, the installer suffered a work-related injury and made a claim against the installation company. The issue before the Division of Workers’ Compensation was whether the installer was an employee of the company or an individual contractor. It determined that the installer was an employee by use of the “relative nature of the work test.” In doing so, it recited the following: “While formerly cases centered on the employer’s ability to control the nature of the work and the daily functions of the employee, case law has since recognized that, in many instances, employees are highly skilled and capable of working independently of direct supervision. ... This does not preclude them from being designated and [sic] employee for the purposes of the Worker’s Compensation Act.” The “relative nature of the work test” requires a court to determine whether an individual is an integral part of the regular business of the purported employer and whether the purported employer has substantial economic dependence on the worker. Here, the Administrative Law Judge held that the test had “clearly been met.” According to the Judge, the installation company was solely in the business of installing carpets in the homes of customers that had been purchased carpet from a retailer. The individual installer’s work was directly related to those business goals. As such, it appeared to be a “cog in the wheel of respondent’s operation.” According to the Judge, “since the work in which [he] was hired to complete was integral to the business function of [the installation business], he was an employee under the relative nature of work test.” Further, it was held that although the installer’s employment was brief, he demonstrated that he was substantially economically dependent on the installation company. Apparently, the judge believed that “a business dependent upon manual labor cannot function without employees and the liberal coverage provisions of the Workers’ Compensation Act dictate that a worker performing labor is an integral part of the respondent’s business cannot be denied compensation despite the label that the employer places upon the relationship.”

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