Here’s a summary of a real court case that looks at an employer’s liability for injuries to an independent contractor’s employee caused by a safety hazard in the employer’s workplace.
The supervisor of an independent contractor called his crew in for a quick rundown of their job responsibilities for an upcoming assignment. “Okay, guys, we have a job lasting several months repairing two cooling towers at the gas company. We’re all going to attend a safety meeting over there where the gas company is going to show us a video and hand out a safety manual. I want everyone to pay attention and do a good job.”
The supervisor at the gas company ran an informative safety meeting. After the meeting, the independent contractor’s supervisor assigned two employees to work in a small dome used to store an ammonium sulfate by-product. They were instructed to perform welding work inside and to construct a doorway to prevent ammonium sulfate from leaving the dome.
The gas company supervisor informed the independent contractor’s supervisor about a potential ammonium sulfate hazard in the dome.
For the first 20 minutes, everything seemed to be proceeding smoothly. Then suddenly one of the employee’s eyes started burning, and he had difficulty breathing. He and his co-worker quickly left the dome and searched for their supervisor. They told their supervisor “we can’t work in there. We can barely breathe”. The supervisor responded by saying “just finish the work quickly and come out”.
The workers followed their supervisors orders and went back into the dome, but soon one of them collapsed from the fumes and was rushed to a hospital where he was diagnosed with reactive airway dysfunction syndrome.
Worker Sues
While collecting workers’ compensation for his injuries, the independent contractor’s employee consulted an attorney who advised him to sue the gas company for failing to provide for his safety.
In court, his attorney stated that although his client did not work for the gas company directly, the gas company was responsible for his safety because it controlled the work area.
The safety manual and video were presented as evidence that the gas company was in control of the well-being of the independent contractor’s employees. And the injured worker’s lawyer told the court that the gas company was negligent in failing to protect the worker.
The Court’s Ruling
The gas company was not responsible for the worker’s injuries, ruled the Supreme Court. The contract clearly gave the independent contractor complete control over the injured employee’s work. Also, it was clear that the independent contractor’s supervisor directed the details of his employees’ work, not the supervisor of the gas company. This meant that the independent contractor was completely responsible for making sure its employees were protected from the hazardous fumes of ammonium sulfate.
What This Means
Generally, a company that hires an independent contractor is not liable for the contractor’s negligence. One exception is when the company retains control over the contractor’s work. Such control would include directing the manner in which the job was done and retaining the right to supervise in detail so that the contractor is not entirely free to do the work in his own way. Usually this control is spelled out in the contract.
If you do hire independent contractors, however, you should provide them with all relevant safety information about your place of work and warn them of any hidden hazards. Also, be aware that certain OSHA standards, such as hazard communication and process safety, require you to provide this information to your contractors.
In the case described here, the independent contractor was told about the presence of ammonium sulfate in the dome. With this knowledge, it was up to them to carry out the work safely. Had the employer failed to provide hazard information to the independent contractor, however, the result might well have been different.
How to Determine Independent Contractor Status
Here’s a 7-step test that can help you determine independent contractor status. It is, however, always wise to check with your area OSHA office or an attorney.
- Is the individual under the direction or control of the independent contractor, not your employer, while working in your workplace?
- Does the contractor have the right to control the means and progress of the work except as to final results?
- Is the contractor engaged in an independently established trade, occupation, profession or business?
- Does the contractor have the opportunity for profit and loss as a result of the services being performed for your company?
- Does the contractor hire and pay his or her assistants (if any) and to the extent that these assistants are employees, supervise the details of their work?
- Does the contractor make services available to other customers even if its right to do so is voluntarily not exercised or is temporarily restricted?
- Do any of the following elements apply?
- The individual is not required to work exclusively for your company.
- The individual is responsible for satisfactory completion of the work and may be held contractually responsible for failure to complete the work.
- You have a contract that defines the relationship and gives contractual rights in the event the contract is terminated by the you prior to completion of the work.
- Payment to the individual is based on factors directly related to the work performed and not solely on the amount of time expended by the individual.
- Such work is outside the usual course of the business for which the services is performed.
- The individual has an IRS Determination (SS-8) of independent contractor status.
If the answer to all or most of the 7 questions above is “yes”, the individual or entity you are dealing with is likely an independent contractor, not an employee. And this fact can play an important role in limiting your company’s liability for injuries to an independent contractor’s employees.
Minimize Risks When Hiring Independent Contractors
The implementation of the Affordable Care Act and emerging economic sectors may lead businesses to make greater use of independent contractors and blur traditional definition of “employment.” The Department of Labor and many states are responding with legislation to crack down on business and impose a greater share of the liability for the acts or omissions of their independent contractors.
With more organizations hiring independent contractors to deal with economic, staffing, and business challenges—with typical duties including janitorial duties, building construction and renovation, different production activities, security, and maintenance—it’s important to understand the risk of liability your organization could face if those workers aren’t properly trained on safety protocols.
Sure, in theory independent contractors are responsible for their activities, including safety, and their liability is not transferred to the company that has hired them. However, in the real world it’s not always so black and white. In fact, there are many situations where your organization could be liable.
For more information or assistance with any of your environmental and safety (EHS) regulatory compliance needs, contact Ralph Carito at Total Environmental & Safety, LLC (Total) at rcarito@TotalEnviron.com or 908-442-8599, or visit our website at www.TotalEnviron.com