Can I get Worker’s Compensation if my employer thinks i am independent contractor but really I am in employee?

Pandola v. Melenio Express Inc. (New Jersey Appellate Division Unreported Decision October 29, 2018)

Submitted by New Jersey Workers Compensation Lawyer, Jeffrey Hark.

When is an employee an independent contractor? Can I get Worker’s Compensation if my employer thinks i am independent contractor but really I am in employee?  How do I determine if I am an independent contractor?

Pukowsky v. Caruso, 312 N.J. Super. 171 (App. Div. 1998) establish the 13 factor test to determine if an employer has the right to control means employee is actually an employee. Those factors are:  1) the employers right to control the means and manner of the workers performance, 2)  the type of occupational supervision /Supervisor unsupervised, 3)  employee skill, 4) who furnished equipment, 5)length of time person has worked, 6)  is there a Supervisor or is the person unsupervised, 7) the method of payment, 8) manner of terminating the relationship, 9) is there annual leave, 10) whether the work is it in integral part of the business of the employer, 11) whether the worker has retirement benefits, 12) whether the employer pay Social Security tax, 13) and the intentions of the party.

The trial judge found that the taxicab driver was an independent contractor and not employed because this driver because he was free to come and go do as he please set up his own schedule, there is no exercise of control over the driver. The Appellate Division reversed the trial judge’s decision.  The appellate court look to factor number nine, the relative nature of the work test which measure is the “extent of economic dependence” of the work or on the business he serves and the relationship of the nature of his work on the operations of that business. This measuring stick was first established in the 1959 decision Marcus v E. Agric Ass’n inc. 58 N.J. 460 (1960).   The court went on to state:

“The Supreme Court has reiterated on numerous occasions that our State’s comprehensive statutory scheme of workers’ compensation coverage “for the compensation of injured workers ‘is remedial social legislation and should be given liberal construction in order that its beneficent purposes may be accomplished.'” Cruz v. Cent. Jersey Landscaping, Inc., 195 N.J. 33, 42 (2008) (quoting Torres v. Trenton Times Newspaper, 64 N.J. 458, 461 (1974)).

As the Court held in D’Annunzio, and reiterated in Kotsovska, “when ‘social legislation must be applied in the setting of a professional person or an individual otherwise providing specialized services allegedly as an independent contractor,’ the trial court should consider three factors: ‘(1) employer control; (2) the worker’s economic dependence on the work relationship; and (3) the degree to which there has been a functional integration of the employer’s business with that of the person doing the work at issue.'” Kotsovska, 221 N.J. at 594 (quoting D’Annunzio, 192 N.J. at 122); see also Hargrove v. Sleepy’s, LLC, 220 N.J. 289, 310 (2015) (emphasizing those three of the twelve Pukowsky factors as most pertinent when applying socially remedial legislation).  Here, of course, there was no dispute regarding Pendola’s economic dependence on Classic. Pendola had been driving for Classic for eleven years, and it was his sole source of income. Although one could debate whether the requirement that Pendola paint his car silver and display prominently the Classic name and phone number was indicia of control by Classic or merely enforcement of Newark auto cab regulations, other aspects of the relationship point unequivocally to a significant level of control by Classic over its drivers.

Besides requiring its drivers install a two-way radio in the cars, at their expense, the drivers were subject to Classic’s rules as to which drivers would receive a dispatched fare. Drivers were not free to pick up any nearby passenger calling Classic for a ride. They were required, pursuant to rules established by Classic, to request the ride from the dispatcher, who would decide which driver would pick up the passenger based on how long the driver had waited since his last fare. Further, as explained by Classic supervisor Solano, when customers complained about the condition of a car, a supervisor would immediately contact the driver and tell him, “[y]ou need to come here so we can look at the vehicle, and you are going to be out until you do so. You have [two] hours.” The testimony demonstrated not only that Classic maintained rules for its drivers, but that it enforced them. Even more important, however, we conclude the judge of compensation misapplied factor nine, “whether the work is an integral part of the business of the ’employer.'” Pukowsky, 312 N.J. Super. at 183. As Justice LaVecchia explained in D’Annunzio, that factor “allows for examination of the extent to which there has been a functional integration of the employer’s business with that of the person doing the work.” 192 N.J. at 123.

Several questions elicit the type of facts that would demonstrate a functional integration: Has the worker become one of the “cogs” in the employer’s enterprise? Is the work continuous and directly required for the employer’s business to be carried out, as opposed to intermittent and peripheral? Is the professional routinely or regularly at the disposal of the employer to perform a portion of the employer’s work, as opposed to being available to the public for professional services on his or her own terms? Do the “professional” services include a duty to perform routine or administrative activities? If so, an employer-employee relationship more likely has been established. Asking those questions here, in our view, makes plain the functional integration of Pendola’s work into Classic’s business. It cannot be seriously disputed that Pendola was one of the “cogs” in Classic’s operation. His work as a driver willing to provide the rides Classic arranged was essential to the success of its business. The work of the drivers was certainly continuous, Classic operated twenty-four hours a day, and thus needed many drivers day and night to carry out its operations. Drivers such as Pendola could not use their own silver Classic car to pick up fares dispatched from competitors of Classic or those attempting to call them directly. The drivers were thus prohibited from using their own cars to further any business but Classic’s. And although a driver’s passengers or hours might vary, the daily routine of picking up Classic’s customers and delivering them to their destinations throughout Newark did not change.

We agree with Pendola that the judge of compensation’s finding that Classic’s business was limited “solely [to] dispatching [Pendola] and drivers of auto cabs” is not supported by the evidence. Although Solano began her testimony by asserting that Classic was only “a dispatching service,” she also referred to it as a “transportation company” and the riders as Classic’s customers, who Classic wooed with web ads, apps, keychains and pens with the company’s name and “nice vehicles, clean vehicles” and punctual, “proper attired drivers.” We also agree with Pendola that the judge of compensation erred in finding that Classic was not dependent on Pendola because if he “was not available to transport a fare, another auto cab driver was waiting to do so.” The compensation judge’s finding that “[n]o one driver was essential to the effective functioning of the business” misapprehends the test. The point, of course, is that Classic was dependent on Pendola and other drivers like him. That the business required multiple drivers to operate does not reduce Pendola’s importance to Classic’s business or make him any less a “cog” in Classic’s enterprise. D’Annunzio, 192 N.J. at 123. Accordingly, we conclude that application of the Pukowsky test establishes Pendola as an employee of Classic under our workers’ compensation laws. ”

The manner in which these issues are answered and presented to the court is the key to success in these types of cases. You need a trial attorney to assist you with these cases! Call Hark & Hark