Are You an Employer or Employee?
Multiple cases regarding workers’ compensation have been decided by the Colorado Court of Appeals this year so far. I wanted to go over a couple of interest to me, which in one case deals with whether one of the parties was an “employer” and in the other case whether the injured party was an “employee.”
In Monell, the plaintiff, Mr. Monell, was employed by a construction company that was subcontracted by Cherokee River, Inc. (CRI) to construct a steel building. While Mr. Monell was on the job he was electrocuted and received severe burns, shock, and his heart temporarily stopped. Mr. Monell sought workers’ compensation benefits from his employer N.J. Liming, and then filed a suit against the landowner and CRI. CRI then moved to dismiss the case arguing that it was immune from any liability because it was Mr. Monell’s “statutory employer” under Colo. Rev. Stat. § 8-41-401. The statute provides that in certain circumstances that there is an employee/employer relationship for the purposes of workers’ compensation claims. If one falls under the definition of “statutory employer” than it is responsible to pay workers’ compensation benefits, and as such would change the dynamics for a liability lawsuit. The lower court agreed with CRI and dismissed.
Mr. Monell argued that the lower court was wrong, and that the court erred in determining that CRI was a statutory employer, and failed to apply the “regular business” test as set forth in earlier case law. The “regular business” test is simply: whether the work contracted out is part of the regular business of the alleged employer. See Finaly v. Storage Tech Corp., 764 P.2d 62 (Colo. 1989).
The Court of Appeals in Monell ruled that because CRI qualified as Mr. Monell’s statutory employer that they did not need to apply the regular business test. C.R.S. § 8-41-401 states that “[a]ny person, company, or corporation operating or engaged in or conducting any business by leasing or contracting out any part or all of the work thereof to any lessee, sublessee, contractor, or subcontractor, irrespective of the number of employees engaged in such work, shall be construed to be an employer” for purposes of workers’ compensation claims.
The importance of this case is that even where a company does not appear to be an employer (as there already was an employer—N.J. Liming), they may in fact be one. Here, because CRI had subcontracted out the work to N.J. Liming they were Mr. Monell’s “employer.” Since Mr. Monell had already received workers’ compensation benefits for his injury he could not sue his “employer” for those injuries, and thus lost his appeal.
In Teller County, the claimant, Mr. Smith, who was the president and incident commander for Teller County Search and Rescue, was traveling to a fire chiefs meeting when he was in a car accident and sustained severe injuries. He filed a workers’ compensation claim asserting that as a volunteer he was an “employee” as defined in C.R.S. § 8-40-202(1)(a)(I)(A), which states that:
volunteer rescue teams or groups, volunteer disaster teams, volunteer ambulance teams or groups, and volunteer search teams in any county, city, town, municipality, or legally organized fire protection district or ambulance district in the state of Colorado… while said persons are actually performing duties… and while engaged in organized drills, practice, or training necessary or proper for the performance of such duties…
are considered an “employee.”
The Court of Appeals ruled that the statute is clear that employee includes volunteer search and rescue workers in certain circumstances, and traveling to attend a meeting satisfies the requirement of “actually performing duties.” Therefore, Mr. Smith was an employee at the time of the accident and qualified for workers’ compensation benefits. The court also stated that the claimant was performing duties that were a “custom and practice” in which Teller County consented to when he was involved in the accident.
For more information about Colorado Workers’ Compensation check out these blogs:
- Why Your Employer has 30 Days to Say an Injury on the Job Qualifies for Workers’ Comp
- Workers’ Comp Benefits, are they Really Enough?
- Injured? Don’t be a Hero
- Do I Qualify for Workers’ Compensation if I Do Not Have a Legal Right to Work in the US?