Utah’s Employer/Independent Contractor Distinction Still Blurred, Even for Judges | Snell and Wilmer
In an opinion issued on February 3, 2022 by the Utah Court of Appeals, the courts’ struggle to distinguish between employees and independent contractors continues. In Jensen Tech Services and Sentinel Insurance Company, Ltd., c. Labor Commission and Sergio Herrera, 2022 UT App 18, Utah Court of Appeals asked to consider whether a person was entitled to workers’ compensation benefits when they fell from a ladder while working at the facility computer systems on a site. It was undisputed that the injured worker had signed a contract in which he agreed that he was an independent contractor. He worked on various installations for more than one contractor, used his own vehicle, used his own tools, but installed cables and other equipment supplied to him by the contractor. There were times when Jensen Tech Services gave him so much work that he couldn’t work for anyone else. He received a 1099, had no withholding, and contractually disavowed any employer-employee relationship. His agreement, however, included a non-competition clause. When he sued for workers’ compensation benefits under Utah law, which requires him to be an “employee,” the administrative judge found that the contractor accepted that the worker was an independent contractor. On appeal to the Utah Labor Board, the Board reversed the ALJ’s decision and found that the worker was an employee and therefore entitled to worker compensation. On appeal to the Utah Court of Appeals, the Utah Court of Appeals found that the Commission’s analysis fell short of what was required and remanded the case to the Commission to “re-examine [the worker’s] employee or independent contractor status in light of applicable law and the guidance we have suggested. identifier. at ¶ 33.
In other words, the ALJ concluded that the worker was not an employee, the multiple members of the Utah Labor Board concluded that he was not an independent contractor, and the three-person panel of the Utah Court of Appeals concluded that a serious question remained whether he was an independent contractor. With so many judges and commission members struggling to agree on the legal meaning of relatively uncontested facts, the state of law in Utah remains a bit unstable. Therefore, for an entrepreneur who wants those providing labor and services to be independent contractors rather than employees, the following factors are critical to consider in the relationship.
- A written contract;
- No non-competition;
- No control over means and methods;
- Fee-for-service; and
- Liability with worker for insurance, equipment, transportation and safety.
The recent decision of the Utah Court of Appeals, while confirming that reasonable minds will continue to disagree on the meaning of undisputed facts under the law, has nonetheless been helpful in providing renewed guidance. and fresh on the factors that everyone should consider.