by Timothy A. Raimey, Jr., Esq.

If an immediate employer of an employee is uninsured – regardless as to the reason – then an employer who has a contract with that company may be responsible for workers’ comp benefits. That employer can become the “statutory employer” since the law makes it an employer for purposes of finding someone to pay benefits; that someone is usually a large self-insured employer or an insurance carrier. This scenario most often arises in the construction industry where a subcontractor does not have insurance and the intermediate or general contractor is left to pay the claim. Even diligent general contractors who verify insurance coverage for one of their subs when they are first contracted can later find out (after the accident) that coverage for the sub was canceled. The requirements for a claimant proving there is a statutory employer are found in O.C.G.A. § 34-9-8. Here is what you can assert to avoid such a finding:

  1. You are not a contractor. There must be a “contractor” relationship between the claimant’s immediate employer and the alleged statutory employer. Georgia courts have found an owner merely in possession or control of a property should not be liable for a worker’s injury unless the owner also serves as a contractor for another entity. This is why generally a homeowner having work done on her home would not be a statutory employer.
  2. You are not subject to the Workers’ Comp Act. O.C.G.A. § 34-9-2 generally requires an employer to employ three or more employees to be subject to the Act. Therefore an uninsured employer with less than three employees cannot be a statutory employer.
  3. The claimant’s injury did not occur on the premises where the contractor has undertaken to execute the work. One exception is when a worker is injured on a highway performing a contract for transporting goods; the “premises” in that situation would be the route the employer took to perform the contract.
  4. The claimant is not an employee of the immediate employer but an independent contractor. In this situation, both the immediate “employer” and the alleged statutory employer may have a joint interest in showing that the claimant is not an employee.

Keep in mind that if you are not a statutory employer, the exclusive remedy provision of the Workers’ Compensation Act does not apply and the alleged statutory employer may be subject to tort liability for the injury. And if you are the statutory employer, you do have the right to go back against the immediate, uninsured employer for benefits you have paid, if that immediate employer was subject to the Act (three or more employees) and supposed to have workers’ comp insurance.