In 1911, one hundred and forty-six garment workers, mostly young women,
died in a fire at the Triangle Shirtwaist Factory in New York City because
they could not escape from the burning building.
This tragedy (and others like it) raised concerns which, among other considerations,
led to passage of workers’ compensation statutes in many states,
including the law in Pennsylvania, which was passed a hundred years ago, in 1915.
Before workers’ compensation, an injured worker (or his family in
case of a fatality) could file a claim in court against his employer.
In order to recover money from the employer, he or she would have to prove
to a jury that the injury (or death) had been caused by the employer’s
At trial, the employer could argue in its defense that the worker’s
negligence had caused his own injury (or death), or, at that time, that
the injury had been caused by the negligence of a fellow worker. As a
result, workers who sued their employers often failed to recover.
The Industrial Accidents Commission reported to the Governor of Pennsylvania
on December 31, 1912, that “in less than five percent of the industrial
accidents in this State is a substantial sum (i.e., as much as medical
expenses and actual wages lost) recovered by the injured man or his dependents”.
In contrast, the Pennsylvania Workers’ Compensation Act of today
is nearly universal in its coverage of on the job injuries. It reliably
pays a substantial portion (2/3 or greater) of wages lost and all of the
reasonable and necessary medical expenses incurred.
On the job, most employees receive a check every week or every other week
from which taxes are deducted by the employer. Every January the employer
sends each employee form IRS W-2. However, some employers advise workers
that they will be treated as independent contractors. Taxes are not deducted
from their checks. They are also typically not paid benefits. In January
they receive a form IRS 1099.
If a 1099 worker is injured, can he receive workers’ compensation
benefits? The answer depends on whether he or she is really an independent
contractor or an employee. The decisive factor, for determination by a
workers’ compensation judge, is whether the employer has the right
to control either the work to be done or the manner in which the work
is to be performed.
When you hire a roofer, he shows up at your home with his own tools. He
usually buys the materials and does the job without much input from you.
You pay him when the job is completed. He is an independent contractor.
If this roofer has workers who help him, he will usually pay them by the
hour at the end of each week or every other week. He will probably provide
the tools needed to install a new roof. He will probably provide the tar
paper, shingles, etc. He will give his helpers instructions which they
will carry out. These workers are employees of his. They are not independent
contractors. This is true regardless of whether he makes deductions from
their pay and regardless of whether he sends them a 1099 or a W-2 in January.
See IRS Ruling 87-41, twenty factors indicating control.
It has been reported that the oil and gas extraction industry,
including companies engaged in the exploitation of Marcellus Shale reserves,
have moved dramatically to utilize 1099 workers.
An injured employee is entitled to workers’ compensation benefits
whether or not the employer has misclassified him as an independent contractor
and regardless of whether the employer sends a W-2 or a 1099.
The above comments which describe legal distinction between employees and
independent contractors do not constitute legal advice.
If you are injured at work there is no substitute for having a personal
discussion with an attorney who is knowledgeable and experienced in representing
claimants in workers’ compensation cases.
Sources and Further Reading:
Report of Industrial Accidents Commission: 1912