Don’t allow your employer to tell you that you are not an employee, and therefore not entitled to workers’ compensation benefits simply because you do not receive a regular paycheck and receive a 1099 form instead of a W2 for tax purposes. The recent New Jersey case of Johantgen v. Brandywine Senior Care Center, A-4883-09T1 (App. Div. October 31, 2011) outlines the difficulties an employer might encounter in trying to prove that a worker is an independent contractor, and not an employee.  

Ms. Johantgen worked as a hair stylist one day a week for residents of the employer’s nursing home. She fell from a chair and injured her wrist while hanging decorations in the area where she worked at the facility. She filed a workers’ compensation claim against the facility, and they denied the claim on the basis that she was an independent contractor, and not an employee of the nursing home.

Ms. Johantgen worked in an assigned location in the nursing home and furnished the majority of her own supplies, while the nursing home provided the fixtures such as the chairs, sinks and a cabinet. The nursing home provided the clients and set the prices for Ms. Johantgen’s services.  After the services were performed Ms. Johantgen submitted a bill to the nursing home. The nursing home would deduct 15 % as their “cut” and pay Ms. Johantgen the remaining 85% of the bill for services she performed. The nursing home gave her a 1099 form each year, and did not deduct any taxes or other items from her pay.

The workers’ compensation Judge found that Ms. Johantgen was an employee of the nursing home, and not an independent contractor. The Appeals Court applied the relative nature of the work test and the control test and found that she was an employee. The relative nature of the work test examines the relationship between the parties, and looks to see if there is a mutual economic relationship between them. The control test looks at the control the Employer retains in the relationship. The Appellate Court found that Ms. Johantgen was an employee under both tests because the nursing home controlled her hours and appointments, and provided the facility where she performed her services; and that there was economic dependency because both parties needed each other for the “services” that each provided. The finding that Ms. Johantgen was an employee enabled her to collect workers’ compensation benefits.

Contrast this case with another case where the worker was injured while providing cleaning services for a homeowner. She alleged she was a domestic employee under the Workers’ Compensation law, rather than an independent contractor. The Judge found that the worker was an independent contractor and not an employee mainly because she was not subject to any right of the homeowner to control the details of her work.

If you have questions regarding your rights under the Workers’ Compensation law, please contact me here in my firm’s Marlton, New Jersey office to set up a free consultation so we can discuss your case in more detail.