States have their own rules regarding workers’ compensation, and Pennsylvania’s favor the worker rather than the employer. However, some employers do whatever they can to keep from paying for this type of insurance.
According to the Pennsylvania Department of Labor & Industry, an employer may legitimately avoid having to purchase workers’ compensation liability insurance if all its workers fall under one or more classifications:
- Longshoremen or railroad workers
- Federal workers
- Casual workers, if the work is not in the employer’s regular course of business and the work is casual in character
- Executive officers granted exclusion
- Those granted exemption because of religious beliefs
- Some domestic workers and agricultural laborers
Workers who do not work on their employer’s premises and who receive materials or articles to prepare for sale may also be exempt from receiving workers’ compensation benefits. Other exemptions may apply, depending on the type of work and nature of the relationship with the employer.
According to the Office of Unemployment Compensation, independent contractors are not eligible for workers’ compensation benefits. Therefore, employers may try to avoid paying for workers’ compensation by misclassifying workers as independent contractors. In Pennsylvania, the employer has the burden of proof in showing these workers are not actually employees.
There must be evidence that the worker customarily engages in a trade, profession, occupation or business that he or she has established independently of the company. The employer must also show that the company does not control or direct the performance of the worker’s services. This includes not only the terms of the contract, but also the day-to-day conduct of the company.