Workers’ compensation: The legal definition of an employee

| Oct 2, 2017 | Workers' Compensation

Employers and employees in New Jersey should learn the exact definition of “employee.” This will ensure that workers know their rights and protections in terms of an on-the-job injury.

If, for example, you are not a legal “employee,” then you will not be able to receive workers’ compensation benefits in the event of a work-related injury. Workers need to educate themselves on their rights in this regard so that they are prepared with appropriate health insurance if they are not covered by their employers’ workers’ compensation insurance.

How the New Jersey Workers’ Compensation Act defines employee

The New Jersey Workers’ Compensation Act offers a liberal definition of employee as compared to the Internal Revenue Code and the Unemployment Compensation statute. In fact, a wide variety of worker-employer relationships give workers the status of “employee” in New Jersey, even though they’re not the usual employee-employer situations.

Having a contract that states the worker is an “employee” of the company, however, might not be sufficient to qualify the workers as a legal employee. As such, having an employee status stated in the contract will not necessarily make the individual eligible for workers’ compensation protections under the law.

The New Jersey Workers’ Compensation Act states two primary ways that “employment” exists:

  • When a business can supervise an individual’s activities and be in control of what the individual is doing for work and how he or she does the work.
  • When the worker is reliant upon income from the company and when the company is reliant on the activities of the worker.

If either or both of these situations exist, then the worker can legally establish his or her employee-employer relationship.

Employee status challenges to a workers’ compensation benefits claim

Sometimes when a worker files for a workers’ compensation claim, the insurance provider will try to deny the claim by saying that the worker was not a legal employee of the company. When this happens, New Jersey workers will need to prove that one of the above tests for the employee-employer relationship is true. If successful, the employee can then receive the workers’ compensation benefits that he or she deserves.

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