lwcc for agents Independent Contractors: Does Classifying an Employee as an Independent Contractor Absolve You of Workers' Compensation Liability? While it is true that independent contractors are not covered under state workers' compensation, Louisiana law sets up specific criteria for what qualifies as an "independent contractor." Some employers mistakenly believe that they can avoid workers' compensation exposure simply by classifying their employees as "independent contractors." However, this is not the case. La. R.S. 23:1021 defines an independent contractor as any person who renders a service, other than manual labor, for a specified recompense for a specified result either as a unit or as a whole, under the control of his principal as to the result of his work only, and not as to the means by which such result is accomplished. Independent contractors who meet this definition are not covered by the Workers' Compensation Act. Manual Labor In order to determine whether an independent contractor is excluded from coverage, you must first determine whether a substantial part of his work time is spent performing manual labor. The courts have defined "manual labor" liberally, looking at the hands-on feature of labor combined with the strenuous quality of the work to determine whether a task is manual or not. If a substantial part of an independent contractor's work time is spent in manual labor, your inquiry is over, and the worker will be covered by the provisions of the Workers' Compensation Act. Independent Work If a substantial part of the independent contractor's work time is not spent in manual labor, you must still be able to demonstrate the independent nature of his services as required by state law. The following considerations are helpful in determining whether a worker qualifies as an independent contractor. 1. The fact that the principal supervises or retains control over the method of the work performed, as opposed to an interest only in the finished product, suggests that a worker is an employee and not an independent contractor. 2. The fact that the principal can terminate the worker's services at will without a corresponding liability suggests that the worker is an employee and not an independent contractor. 3. Payment on an hourly basis suggests that the worker is an employee and not an independent contractor. Payment of a specified price for a specified result, on the other hand, suggests an independent contractor relationship. 4. The designation of a worker as an employee on the principal's payroll suggests the worker is an employee and not an independent contractor. 5. The fact that a worker has the right to hire his own helpers or assistants suggests he is an independent contractor. If the principal has control over whether the worker can retain his own helpers or assistants, this suggests the worker may be an employee. 6. The fact that a principal provides material and equipment to perform the work suggests the worker is an employee and not an independent contractor. 7. The fact that the worker is an integral part of the principal's business suggests the worker is an employee and not an independent contractor. 8. The fact that a worker performs work exclusively for a principal over an extended period of time suggests the worker is an employee and not an independent contractor. In considering whether one of your workers is an employee or an independent contractor, always remember that there is no black and white rule. The factors listed above are all possible considerations, none of which are necessarily determinative on their own. The courts ultimately will determine whether a worker qualifies as an independent contractor on a case-by-case basis. You should also keep in mind that if a worker is excluded from workers' compensation coverage as an independent contractor, you may face tort exposure if the worker is injured due to your company's negligence. Back

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