WC Risk Alert: Independent Contractors
Refik Ademovic worked as a cab driver for Taxi USA. Ademovic owned his own taxi, kept all of the fares he earned, did not receive a salary, paid a monthly franchise fee, set his own schedule, and was free to decline incoming calls from Taxi USA in order to pursue other driving opportunities. On August 11, 2011, Ademovic was shot by a passenger.
Ademovic’s claim for workers’ compensation benefits was denied by Taxi USA on the basis that he was an independent contract, not an employee. The Deputy Commissioner filed an Opinion and Award denying Ademovic’s claim for benefits, emphasizing the express language in the contract stating that Ademovic was an independent contractor as well as the fact that Ademovic owned his own taxi and could decline calls from Taxi USA’s dispatcher whenever he wanted. The Full Commission entered an Opinion and Award reversing the Deputy Commissioner’s holding and finding that Ademovic was an employee. The Full Commission stated that Ademovic’s work was a necessary and integral part of Taxi USA’s business because he purchased his taxi from Taxi USA, used a company-issued cell phone, and was required to have a yellow taxi with Taxi USA’s information printed on the side.
On December 2, 2014, in Ademovic v. Taxi USA, LLC, et al, the Court of Appeals reversed the Full Commission’s decision that Ademovic was an employee. The Court examined all aspects of Ademovic’s employment and found that he kept all of the fares he earned, paid Taxi USA a franchise fee, owned his own taxi, and was free to determine his own schedule. The Court found that Taxi USA simply did not assert enough control over Ademovic’s work for him to qualify as an employee. For that reason, they found that he was an independent contractor and that his injury was not compensable.
Risk Handling Hint: Ademovic demonstrates that even if a contract explicitly states that one is an independent contractor, courts will still look to the issue of control. Other factors, including employer-issued work supplies, marketing and branding requirements, control of hours and method of payment factor into the analysis concerning whether an injured worker is an independent contractor or an employee.