Independent Contractor

Independent Contractor: Elements

MONTANA SUPREME COURT DECISIONS

Wild v. Montana State Compensation Fund, 2003 MT 115 ; Mathews v. Liberty Northwest Ins. Corp., 2003 MT 116 The Montana Supreme Court applies a two-step process in determining whether an individual qualifies for independent contractor status. First, the Court looks to the "control factors", that is: (1) direct evidence of right or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) right to fire. Second, the Court looks to whether the individual is engaged in an independently established trade, occupation, profession, or business. Unless both parts of the test are satisfied by a convincing accumulation of undisputed evidence, the worker is an employee and not an IC.

WORKERS' COMPENSATION COURT DECISIONS

Hallquist v. Independent Contractor Central Unit [06/10/10] 2010 MTWCC 16 Where two of the four factors weigh toward two alleged employees being independent contractors, one factor weighs slightly in favor of them being employees, and one factor is neutral, the Court concludes that the control factors indicate the alleged employees were independent contractors.

Emergency Preparedness Systems v. Scobie [08/17/09] 2009 MTWCC 28 Where the Court found that two of the four control factors weighed in favor of employee status because the employer furnished the employee with essential equipment necessary for the performance of his duties and had the right to fire the employee, the Court concluded that the employer failed to satisfy the first part of the two-part test used to determine employment status.

Cardwell v. UEF [06/15/07] 2007 MWCC 22 Where the only evidence that Petitioner had an independently established occupation, profession, or business was that Petitioner bid and completed a drywall job for a friend of his sister, no independently established business exists. The employer testified that he supplied most of the equipment and all of the materials for the drywall jobs, including scaffolding, stilts, and sheetrock. The employer also terminated Petitioner’s employment, and decided what schedule Petitioner would work. All of this is overwhelming evidence that Petitioner was an employee, not an independent contractor.

Feather v. UEF [03/28/05] 2005 MTWCC 15 Under part (a) of the statutory two-part test for determining whether a worker is an independent contractor, the party hiring the worker must demonstrate that the worker is in fact free from the hiring party’s control and from any right to control. In determining the right to control, four factors must be considered. Those factors are: (1) direct evidence of right or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) right to fire.

Feather v. UEF [03/28/05] 2005 MTWCC 15 Where the party hiring a caregiver dictates the details and schedule for care, and expressly reserves the right to dictate those details, provides all supplies, and retains the right to fire at will with liability for payment of a full day’s wages for any day or part of a day worked, part (a) (freedom from control) of the independent contractor test is not met and the caregiver is an employee.

RAM Montana, Inc. v. ICCU/UEF [2/20/04] 2004 MTWCC 13 A worker who regularly works for a contractor, who does not bid jobs, who is paid by the day, who is furnished with transportation to and from jobs in vehicles owned by his employer, who is furnished with equipment other than small hand-tools, and whose activities are ultimately directed by the contractor who makes it clear that the worker will be terminated unless its instructions are followed, is an employee and not an independent contractor.

Mortensen v. ICCU [7/12/01] 2001 MTWCC 38 Under unemployment insurance laws, employment status is determined pursuant to the AB test. Part A of the test considers the right of control of the employing party over the hired party. Part B considers whether the hired party is engaged in an independently established business. § 39-51-201(15).

Fliehler v. UEF [6/01/01] 2001 MTWCC 29 One of the elements of independent contractor status is the existence of an independent business. Note: Affirmed in Fliehler v. Uninsured Employers' Fund, 2002 MT 125.

Thoreson v. Uninsured Employers' Fund [6/28/00] 2000 MTWCC 40 Under 39-71-120, MCA (1995), worker is employee for purposes of the Workers' Compensation Act unless all three statutory criteria are met, including existence of exemption granted under 39-71-401(3). Where worker had not obtained exemption, one criteria is absent and employee status proven for purposes of the workers' compensation act. Court also finds AB test not met where evidence indicates employer retained right to control work of roofer/claimant. Affirmed in nonciteable decision 2002 MT 6.

Art v. Independent Contractor Central Unit ex. rel. Patricia Mason [6/23/00] 2000 MTWCC 37 Under 39-71-120, MCA (1995), worker is employee for purposes of the Workers' Compensation Act unless all three statutory criteria are met, including existence of exemption granted under 39-71-401(3). Where worker had not obtained exemption, inquiry is over and employee status proven for purposes of the workers' compensation act. For purposes of unemployment insurance law (39-51-201(14), MCA (1995), the IC exemption is not required, but the AB test for determining IC status was not met where claimant was not engaged in an occupation, trade or business, but worked only for employer at issue.