In New York, there is a distinction between a general employer and a special employer for the purpose of liability in a workers’ compensation claim. The general employer is the one who hires and pays the employee and the special employer is the one for whom work is done. The classic general and special employer situation is a staffing agency that provides workers to another entity.
The issue of general and special employment is not automatically addressed by a Law Judge. It can be used as a defense to liability, or even raised by the claimant in situations where he knows his employer does not have workers’ compensation coverage. The issue must be litigated, and this means the production of lay witnesses, contractual documents, job descriptions, and workers compensation policies, if applicable.
The Law Judge will then consider multiple factors in order to determine whether a general and special employer situation exists, and assessment of the factors is at the discretion of the Law Judge. Braxton v. Mendelson sets forth the factors to be considered. 233 N.Y. 122, 124, 135 N.E. 198 (1922). They are:
• Who pays the wages?
• Who has the right to hire and fire the worker?
• Who directs the worker where to go, what needs to be done and how it needs to be done?
• Who owns the tools and materials that the worker uses to get the work done?
• What is the nature of the business in which the work is being done?
• Whose business was the worker engaged in at the time of the loss?
Other factors include whether there is an agreement between the general employer and the special employer for workers’ compensation coverage, or if the worker chooses to receive workers’ compensation benefits from the general employer, if it is being offered.
Since these are merely factors, and not requirements, decisions on whether a general and special employer exists in a particular case may vary from Judge to Judge.
Further, it is important to note that even when there is a finding that there is a general and special employer, it does not necessarily mean that liability will be apportioned. The Law Judge can very well determine that one party is fully liable.
About “Friday F.A.Q.”
Friday F.A.Q. is a series of articles from LOIS partner Tashia Rasul answering commonly asked questions about New York workers’ compensation law. Tashia’s goal is to provide answers “in a straightforward way” to clear up common confusions and explain New York workers’ compensation tactics and techniques as well as case law application. Look for the articles on our website and by following Tashia on LinkedIn.