Independent Contractor: Independent Contractor Exemption

MONTANA SUPREME COURT DECISIONS
Wild v. Montana State Compensation Fund, 2003 MT 115 A worker may be an independent contractor at the time the Department of Labor approves an application for the IC exemption, but change status as a factual matter later. An employer may not ignore a later reality simply because the person was once issued an IC exemption.
Wild v. Montana State Compensation Fund, 2003 MT 115; Mathews v. Liberty Northwest Ins. Corp., 2003 MT 116 Although section 39-71-401(3), MCA (1999), provides that an independent contractor exemption approved by the Department of Labor and Industry is conclusive as to IC status and precludes the applicant from obtaining workers compensation benefits, an employer has the obligation to make an initial good faith inquiry to determine whether the worker is an independent contractor in fact, as opposed to merely in name. An employer who fails to inquire whether the worker in fact meets the control and independently established business test cannot rely on the exemption.
Wild v. Montana State Compensation Fund, 2003 MT 115; Mathews v. Liberty Northwest Ins. Corp., 2003 MT 116 Section 39-71-401(3), MCA (1999), does not conclusively preclude any factual inquiry into whether an employee/employer relationship exists once the worker has been issued an exemption under the section.
Gonzales v. Walchuk and Ekblad, 2002 MT 262 Although section 39-71-401(3)(c), MCA (1997) plainly states that an application for independent contractor status approved by the DOL is conclusive as to independent contractor status, the presumption presupposes than an applicant knowingly and voluntarily completed and submitted the application to the DOL. Where appellant, an immigrant from Mexico with limited English skills, testified at deposition that her alleged employer told her the IC form was "not important" and only necessary for "tax purposes," and that she did not understand what it was, she raised a genuine issue of material fact as to whether the certificate was obtained by fraud, which would nullify the presumption. In a case alleging that plaintiff's employers failed to provide her with a safe workplace and workers' compensation insurance, the district court erred by granting summary judgment for defendants on basis of the IC presumption.
 
MONTANA WORKERS' COMPENSATION COURT DECISIONS

Emanuel v. Montana State Fund [05/01/15] 2015 MTWCC 8 Because the Court can determine whether Petitioner was an employee of an uninsured contractor, or an independent contractor working under a valid ICEC, the Court can determine the Petitioner’s employment status without joinder of the UEF.

Emanuel v. Montana State Fund [04/27/15] 2015 MTWCC 6 While the UEF can rely upon an ICEC as a reason to deny UEF benefits, it has no authority to make a decision whether a person is an employee or an independent contractor that is binding beyond a claim for UEF benefits; that authority lies with the ICCU under ARM 24.35.101(6).

McCone County v. State of Montana, WC Regulation Bureau, Independent Contractor Central Unit, In Re Johnson [06/19/12] 2012 MTWCC 19 When determining employment status for purposes of an unemployment insurance claim, § 39-51-201(15), MCA, defines an independent contractor (IC) as someone “working under an independent contractor exemption certificate provided for in 39-71-417.”  Since the alleged IC had neither workers’ compensation insurance nor an IC exemption certificate and did not perform service from a fixed business location so as to exempt her from a duty to apply for an IC exemption pursuant to § 39-71-417, MCA, solely for the purposes of Title 39, Chapter 51, MCA, the alleged IC does not meet the definition of an independent contractor and is, therefore, an employee.
Hallquist v. Independent Contractor Central Unit [06/10/10] 2010 MTWCC 16 Although the department found two auto mechanics’ lack of independent contractor exemption certificates to be evidence in support of the department’s conclusion that the mechanics were employees, this Court gives no weight to the lack of exemption certificates because the mechanics had a fixed business location and therefore had no statutory duty to obtain independent contractor exemption certificates.
Mathews v. Liberty NW Ins. Corp. [7/29/03] 2003 MTWCC 53 Defense alleging fraudulent inducement by claimant on account of his use of an Independent Contractor Exemption is incompatible with and contrary to Supreme Court decisions in Mathews v. Liberty Northwest Ins. Corp., 2003 MT 116, and Wild v. Montana State Fund, 2003 MT 115, and is therefore dismissed and stricken.
Bjorgen v. Melotz Trucking, Inc./UEF [4/24/03] 2003 MTWCC 32 An independent contractor exemption only applies to the specific occupation or work encompassed by the exemption.
Bjorgen v. Melotz Trucking, Inc./UEF [4/24/03] 2003 MTWCC 32 An independent contractor exemption for "truck driver - owner/operator" applies only to truck driving as an owner/operator. It does not apply to employment as a truck driver driving the employer's trucks.
American Seamless Raingutters [1/25/01] 2001MTWCC 4 The Department of Labor and Industry does not have standing to challenge an IC exemtion once the exemption is issued. Section 39-71-401(3)(f).
American Seamless Raingutters [1/25/01] 2001MTWCC 4 There is no statutory authority for the Department or the Workers' Compensation Cout to cancel an IC exemption prior to expiration of the 3-year period for the exemption which is specified in 39-71-401(3)(d).
American Seamless Raingutters [1/25/01] 2001MTWCC 4 Section 39-71-401(3(c) means exactly what it says - an IC exemptionis conclusive as to employment status. There is no statutory authority for either the Workers' Compensation Court or the Department to retroactively reiew employment status in the face of an exemption.
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. Note: 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.
Z Works, Inc. v. Barnaby and UEF [3/3/98] 1998 MTWCC 19 Summary judgment granted to UEF establishing liability of uninsured employer where undisputed affidavit proves painter/bookkeeper had not been granted an independent contractor exemption under section 39-71-120, MCA (1995). While the requirement of an exemption may be a trap for employers unschooled in the technicalities of the 1995 legislation, which added the exemption requirement, the Court must apply the law as written. Even assuming claimant told the employer not to purchase workers' compensation insurance, the advice of a bookkeeper or accountant, or even an attorney, cannot relieve the employer from its statutory obligation.
Bouldin v. UEF/Larry Hurt or Roger Lucas Construction [10/22/97] 1997 MTWCC 58 Under section 39-71-401(3), MCA (1995), the independent contractor exemption (based on an application approved by the Department) is conclusive and precludes petitioner from obtaining benefits. Where the parties stipulated an IC exemption was in effect governing the work of a carpenter, and that the parties hiring the petitioner checked on the existence of the exemption and relied on the exemption, the WCC rejects petitioner's argument that the Court must separately determine the existence of criteria set out in section 39-71-120, MCA (1995). While section 39-71-120, MCA (1995), lays out the substantive criteria for making the independent contractor determination, section 39-71-401(3), MCA, provides that the Department of Labor is the forum for making that determination and once the determination is made, i.e., the exemption is issued, that determination is conclusive.