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Determining Whether a Worker is an Employee or Independent Contractor and Entitled to Workers’ Compensation Benefits

March 16, 2022
June 27, 2019

The proliferation of the gig economy has created a renewed interest in the distinction between employees and independent contractors. In Massachusetts, the Workers’ Compensation Act defines an employee as, “every person in the service of another under any contract of hire, express or implied, oral or written.” See M.G.L. c. 152 § 1(4). The Massachusetts Review Board, in McTavish v. O’Connor Lumbar Co., 6 Mass. Workers’ Comp. Rep. 174, 177 (1992), enumerated a series of factors to determine whether a worker is an employee or and independent contractor. These factors include:

the extent of control exercised by the employer over the details of the work;
whether the worker was engaged in a distinct occupation or business;
whether, in the locality, the type of work usually proceeded under the direction of an employer or by an unsupervised specialist;
the skill required for the occupation;
whether the employer or the worker supplied the tools and place of work;
the length of time of the working relationship;
the method of payment;
whether the work was part of the regular business of the employer;
whether the parties believed they were creating an employment relationship; and
whether the alleged employer constituted a business.

In 2011, the review board added two factor to the existing test which consisted of: (1) the tax treatment applied to payment; and (2) the present of the right to terminate the relationship without liability, as opposed to the workers’ right to complete the project for which she was hired. Whitman’s Case, 80 Mass. App. Ct. 348 (2011).

Recently, the review board revisited this issue in Camargo’s Case, 479 Mass. 492 (2018). The claimant argued that the review board should apply the definition of employee under M.G.L. c. 149 § 148B(a). However, the review board affirmed the hearing judge’s opinion and found that for the purposes of the Workers’ Compensation Act, the independent contractor statute under § 148B(a) is not applicable and does not determine whether a claimant is an employee for the purposes of benefits under the Worker’s Compensation Act.

In Camargo, the claimant worked as a newspaper delivery driver for Publishers Circulation Fulfillment (PCF). PCF provided a home delivery service of newspapers and paid delivery drivers to deliver the newspapers to subscribers, but did not publish the newspapers itself and acted as an intermediary to deliver the newspapers. The claimant was hired by PCF and signed various contracts over the years which stated she was an independent contractor. This contract designated routes for her to deliver papers to customers, but allowed her to make the deliveries in any order she wished. The one condition was that the deliveries be finished by 6:00 a.m. on weekdays and 8:00 a.m. on weekends.

The claimant used her own vehicle to deliver the newspapers. She was paid for each newspaper delivered and received a weekly stipend. PCF required that the newspapers be delivered dry and undamaged and the drivers purchased bags to wrap the newspapers in to keep them dry, but this was not mandatory. As part of the contract, the claimant was allowed to hire assistants and to subcontract her deliveries, which she did on occasion. She was also permitted to work for other businesses. This claimant filed her taxes as an independent contractor.

At hearing, the judge held that the claimant was an independent contractor and was not entitled to benefits under the Workers’ Compensation Act. The review board affirmed the judge’s decision and noted that based on the definition of “employee” in the statute and applying the McTavish/Whitman and factors, that the worker was an independent contractor.

Many of the cases that have come before the review board concern construction workers. Other cases involve domestic servants such as maids and nannies. Under the act, seasonal, casual, or part-time (less than 16 hours per week) domestic servants are excluded from the statute. M.G.L. c. 152 § 1(4). In Murphy v. Coperthwaite, the review board held that a nanny who worked in excess of 16 hours per week and provided child care and household domestic care, was considered an employee and could receive compensation under the act for her work related injury. 18 Mass. Workers’ Comp. Rep. 102 (2004).

As the gig economy continues to thrive in the coming years, the factors enumerated by the review board can provide helpful guidance to business owners and insurers about who constitutes an employee for the purposes of workers’ compensation coverage.