What Is an Employee Under Alabama Workers’ Compensation Law?

What Is an Employee Under Alabama Workers’ Compensation Law?

One of the first questions that must be answered in any Alabama workers’ compensation claim is surprisingly simple: Was the injured person an employee?

Most people assume they know the answer. If they were working when they got hurt, they naturally believe they must be an employee. Unfortunately, workers’ compensation law is not always that simple.

In many cases, employers and insurance companies deny claims by arguing that the injured worker was not actually an employee at all, but instead an independent contractor. If that argument succeeds, the injured worker may lose the right to workers’ compensation benefits entirely.

Why Does Employee Status Matter?

Alabama’s Workers’ Compensation Act generally protects employees who suffer injuries arising out of and during the course of their employment. However, independent contractors are generally not covered by the Act.  As a result, determining whether someone is an employee or an independent contractor can become one of the most important issues in a workers’ compensation case.

It Doesn’t Matter What the Company Calls You

One of the biggest misconceptions in workers’ compensation law is that an employer gets to decide whether someone is an employee simply by calling them an independent contractor, but that is not how the law works.

An employer cannot avoid workers’ compensation obligations simply by handing a worker a 1099 tax form or requiring them to sign an “independent contractor agreement.”  Courts look beyond labels and examine the actual relationship between the parties.

The Right of Control Test

Alabama generally focuses on what is known as the right of control test.  The central question is Who has the right to control how the work is performed?  If the company has the right to control the details of the worker’s job, the worker is often considered an employee, even if the company never actually exercises that control.

Factors Courts Often Consider

No single factor determines whether a worker is an employee; instead, courts often examine several considerations, including:

Who Controls the Work?

Does the company tell the worker:

• When to work?
• Where to work?
• How to perform the job?

The more control exercised by the company, the more likely the worker is an employee.

Who Provides the Tools, Equipment or a Uniform to Wear?

Workers who use equipment supplied by the company are often more likely to be considered employees, as are those who are required to wear a company uniform.

How Is the Worker Paid?

Employees are often paid:

• Hourly
• Weekly
• Salary

Independent contractors are more commonly paid by the job or project.

Can the Worker Work for Others?

Independent contractors often perform work for multiple businesses.

Employees are generally more closely tied to a single employer.  If you work 40 hours a week for someone, there isn’t really time for the worker to perform work for anyone else.

Who Bears the Risk of Profit or Loss?

Independent contractors frequently operate their own businesses and can either make a profit or suffer a loss.  Employees typically receive wages regardless of whether the employer makes money on a particular project.

What About Delivery Drivers and Gig Workers?

Modern employment arrangements have created new challenges.  Delivery drivers, rideshare drivers, owner-operators, and other gig-economy workers are often classified as independent contractors. However, simply calling someone an independent contractor does not end the analysis.

The real question remains-how much control does the company have over the worker and the work being performed?

As these types of employment arrangements become more common, disputes regarding employee status continue to arise with increasing frequency.

Why This Issue Is So Important

If a worker is found to be an employee, they may be entitled to workers’ compensation benefits should they suffer a job injury, including:

• Medical treatment
• Temporary Total Disability benefits
• Temporary Partial Disability benefits
• Permanent disability benefits
• Future medical treatment

If the worker is found to be an independent contractor, those benefits may not be available under Alabama’s Workers’ Compensation Act. That is why employers and insurance companies sometimes vigorously dispute employee status in serious injury cases.

Every Case Is Different

There is no single fact that automatically makes someone an employee or an independent contractor. The determination depends upon the total relationship between the parties and the specific facts of each case.

In some situations, workers who have always believed they were independent contractors may actually qualify as employees under Alabama law. Conversely, some workers who assume they are employees may discover that the law treats them differently.

Before an injured worker can receive workers’ compensation benefits, there must first be an employer-employee relationship.

If you were injured while working and have been told that you are an independent contractor or otherwise not covered by workers’ compensation, it may be helpful to speak with an attorney experienced in Alabama workers’ compensation law.

At Powell and Denny, we have spent decades helping injured workers throughout Alabama determine their rights under the Workers’ Compensation Act, don’t hesitate to contact and speak with one of the experienced Alabama Workers Compensation and Social Security Disability attorneys at Powell and Denny today for a free consultation. Appointments are available in person, or virtually via Zoom if more convenient.  Powell and Denny would appreciate the opportunity to help.  And remember, there is no fee unless you win.

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