YOU NEED TO BE A CONTRACTOR FOR WORKERS’ COMPENSATION IMMUNITY TO APPLY

If you are a contractor, you are aware of workers’ compensation immunity when it comes to injuries on the site; and, if not, you should be.  It is this workers’ compensation immunity (where workers compensation is the exclusive form of liability for an injured employee) which is why a contractor should generally always want to ensure its subcontractors have workers’ compensation insurance.   Workers’ compensation immunity would protect a contractor that is being sued by a subcontractor’s employees that are injured on the job.  For more information on workers’ compensation immunity, please check out this article and this article.

In this regard, Florida Statute s. 440.10(1)(b) provides:

In case a contractor sublets any part or parts of his or her contract work to a subcontractor or subcontractors, all of the employees of such contractor and subcontractor or subcontractors engaged on such contract work shall be deemed to be employed in one and the same business or establishment, and the contractor shall be liable for, and shall secure, the payment of compensation to all such employees, except to employees of a subcontractor who has secured such payment.

(If the subcontractor does not have workers’ compensation insurance, the contractor is deemed the statutory employer and its workers’ compensation insurance would apply. Otherwise, the subcontractor’s workers compensation insurance would apply.)

However, it is important to understand that workers’ compensation immunity applies to contractors, and not to owners.  For example, in Tampa Electric Co. v. Gansner, 45 Fla. L. Weekly D2358a (Fla. 2d DCA 2020), a public utility company hired an electrician to perform maintenance work at its generating facility.  Two of the electrician’s employees were injured when an access door at the generating facility blew open.  The injured employees and their families filed a personal injury lawsuit (negligence lawsuit) against the public utility company.  The public utility company asserted workers’ compensation immunity as an affirmative defense and moved for summary judgment on this defense.  The trial court denied the summary judgment finding that the public utility company “is not entitled to workers’ compensation immunity because it is not the statutory employer of either [of the injured employees of the electrician].”  Gansner, supra.

On appeal, the Second District agreed with the trial court.  The public utility company would be entitled to the protection of workers’ compensation immunity as the statutory employee of the injured employees of the electrician only if it was a contractor that sublet a portion of its work to the electrician.  The Second District reviewed authority that found that to be considered a contractor, the party’s “primary obligation in performing a job or providing a service must arise out of a contract [with a third party].”  Gansner, supra, (quotation and citation omitted).  Although the public utility company tried to come up with a creative argument based on the utility company’s work for its customers, the appellate court was not persuaded:

We therefore conclude that [the public utility company] is not the statutory employer of either [of the electrician’s injured employees]. Although [the public utility company] promises to exercise reasonable diligence to provide power to its customers pursuant to its tariff, nothing in the tariff — or in any other source that it has identified — imposes upon it a contractual obligation to its customers to maintain its electrical generating equipment. Instead, its obligation to maintain its equipment arises purely out of an administrative regulation and thus is not an obligation that it can “sublet” to a third party for purposes of section 440.10(1)(b) absent a concomitant contractual obligation. The trial court, therefore, correctly denied [the public utility company’s] motion for summary judgment based on workers’ compensation immunity.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

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