What Is A Statutory Employer?

One of the requirements of a valid workers’ compensation claim is that a worker must sustain an injury in the course of employment to receive benefits. The term “in the course of employment” is not statutorily defined in Pennsylvania. Instead, this term has been continually “defined” by administrative and civil courts to the extent that it is not always obvious whether an injury is work-related. The assistance of an experienced workers compensation attorney may help clarify whether an injury is work-related.

Injuries may frequently be considered work-related even if they occur outside the context of a standard employment relationship. While an employer may not be a direct employer and an injury may seem not to have occurred in the course of employment, an employer may still qualify as a “statutory employer” under the Pennsylvania Workers Compensation Act (the “Act”). The result of such a finding? An injured party may receive workers compensation benefits.

There are employment situations where it may not be apparent that a party performing some job or service would be entitled to workers’ compensation benefits if injured on the job. Often, these situations arise involving contractors and subcontractors.   

There are three necessary elements that must be established in order for a contractor to be held liable for the payment of workers’ compensation benefits based on a statutory employer theory under Section 302(a) of the Act:

  • A valid contract between contractor and subcontractor;
  • The contract involves regular or recurrent part of the contractor’s business, occupation or trade;
  • The subcontractor did not otherwise secure payment of workers’ compensation benefits from another policy.

If all of the above elements are present, then a contractor could be deemed a statutory employer of the subcontractor’s employees, and therefore liable for the payment of workers’ compensation benefits to the subcontractor’s employees for any work-related injury. 

Section 302(b) of the Act contains the test for determining if a contractor is a statutory employer of a laborer or assistant. The elements include the elements described above (contract, regular business) as well as permission of entry of the laborer or assistant on the employer’s premises and control of this individual’s performance.

A contractor who is deemed a statutory employer pursuant to the Pennsylvania Workers’ Compensation Act is liable for wage-loss, specific-loss, and medical benefits similarly to how a traditional or direct employer is liable under the act.

The Act grants employees their exclusive remedy against employers. Depending on the circumstances of a case, an employer may want to be deemed a statutory employer to take advantage of the Act’s exclusive remedy provisions.

Since Powell Law was founded by James Powell, Sr. in 1906, our attorneys have litigated workers’ compensation cases involving all types of workplace injuries. Our body of knowledge and expertise clearly provides our clients with a distinct and incomparable advantage. Contact Powell Law at (570) 961-0777. The consultation is FREE.

What Is A Statutory Employer?

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