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Fighting the ‘Statutory Employer’ Defense

The Pennsylvania Workers’ Compensation Act aims to ensure that workers are provided for financially if they get hurt on the job. Ironically, large corporations are using the Act to shield themselves from responsibility when their negligence causes a worker’s injury.

Companies use Section 203 of the Act to claim the status of “statutory employer.” Under Section 203, a general contractor must maintain workers’ compensation insurance and pay out on that insurance if a worker is injured on the job and the worker’s immediate employer, normally a subcontractor, doesn’t carry workers’ compensation insurance.

But today, it’s rare for subcontractors not to carry workers’ compensation insurance; their contract with a general contractor normally requires them to. Yet, because general contractors — or a facility owner or whoever meets the requirements of a statutory employer —  are potentially liable for paying compensation benefits to a subcontractor’s employees, they are immune from litigation based in common law tort.

So, if a worker suffers injuries and loss through the negligence of a corporation that his or her employer is subcontracted to, and that corporation establishes itself as a statutory employer, the worker is barred from suing the corporation. As a result, he or she is forced to settle for whatever is provided through a workers’ compensation insurance policy — which is normally much less than what a personal injury lawsuit against a large company would generate.

Obviously, being able to claim statutory employer status is a huge protection for large companies. But courts don’t automatically accept such claims. If you are injured on the job or you are an attorney who has a client who is injured at work, you should turn to a firm that is knowledgeable in workers’ compensation law and the statutory employer defense.

McMonagle Perri is experienced in litigating against insurance companies that try to employ the statutory employer defense against liability. The firm has defeated this defense by distinguishing the facts of a case from the five-point test the Pennsylvania Supreme Court established in McDonald v. Levinson Steel Co. to determine statutory employer status. It has successfully argued — relying on McDonald and the federal appeals court decision in Jamison v. Westinghouse Electric Corp. — that courts must exercise great care when determining whether to accept a company’s claim of statutory employer status.

McMonagle Perri works to ensure that the Workers’ Compensation Act is used to protect workers and not used against them to protect the pockets of big-business.