Statutory Employees In Workers Compensation Cases

Florida Workers Compensation Law includes a provision for a statutory employee/employer status. This status usually involves a general contractor and a subcontractor involved in the construction industry. However, there are many examples of this relationship outside of the construction industry. Thus, the statutory employee/employer status is not limited to the construction industry.

What is a statutory employee?

Contractor and Subcontractors

In the construction industry there is usually a General and a Subcontractor whom contract to perform a specific project. Subcontractors are, by Florida Statute Section 440.01, considered statutory employees of the General Contractor. Following that logic, the general contractor is responsible for providing Workers’ Compensation benefits to the subcontractor, unless the subcontractor provides its own insurance benefits. The relationship is symbiotic; even if a contractor sublets or gives away part of his/her contract work to another subcontractor, all of the employees of such contractor/subcontractor, so long as they are employed in the same business, will be considered employees. The subletee contractor would become stautory employees of the main contractor; unless the subcontractor is already providing workers’ compensation benefits. However, the Law in Florida is that under Section 440.10 (1)(b) of the Florida Statutes, one must “have an obligation to perform some work for another; the party’s primary obligation in performing a job or providing a service must arise out of a contract, and must refer to an obligation under the prime (main) contract between the contractor and a third party.” What this means is that if a contractor is hired to paint fences by a Condo Association, and the contractor sublets this to a subcontractor, then the employees of the subcontractor become statutory employees of the General Contractor by virtue of the contract between the General Contractor and the Condo Association. The primary obligation under the main contract was to paint fences, and this work is being performed by the stautory subletee party.

What is a statutory employee?

Outside the Construction Industry

When a subcontractor sublets an obligation, we are merely saying that they are giving another party an obligation under a contract to perform that same job. This same logic follows with industries outside of the construction world. For example, a Sun Sentinel Newspaper entered into an agreement with a newspaper distributor in Palm Beach County. The newspaper distribution then hired multiple teenagers to go door to door to sell newspaper subscriptions. The Sun Sentinel had a prime (main) contract with its advertisers to publish their ads and to deliver the ads to the subscribers as well. Thus, the Sun Sentinel subletted their delivery portion of the contract, and the Sun Sentinel would become the Statutory Employer of both the newspaper distributor and the teenagers that were hired by the newspaper.

In conclusion, there must be a contract in which all or part of it has been subcontracted to another. So long as all parties have an obligation to perform work or pay for that same work, then a statutory employer/employee relationship arises. Furthermore, the general contractor need only sublet their portion of the contract to another, and if that entity sublets their portion to another, so long as there is a main contract contemplating that work, we have a statutory employer/employee relationship!