The New Jersey Workers' Compensation Act is applicable to a broad range of employment relationships. On occasion, the actions taken by a non-traditional party may result in the establishment of an employment relationship. This includes the unsuspecting homeowner who directs another in the performance of certain household and/or residential property related chores, tasks and/or projects. A homeowner must be aware of his/her actions which could result in liability under the Act.
A typical homeowner is provided insurance coverage under a homeowner's insurance policy. This includes workers' compensation insurance coverage. A policy allows for payment of benefits to a residential employee in the event of bodily injury, occupational disease or cumulative injury. This includes all benefits required by the Act.
The criteria for establishing an employment relationship is set forth in N.J.S.A. 34:15-36. An employer can be classified as being a natural person, partnership or corporation. In order to establish an employment relationship, an employer must receive a service in exchange for financial consideration. However, an employment relationship does not include "casual employment." If not in connection with any business of the employer, this is employment that is not considered to be regular, periodic or recurring. The term "casual" connotes a brief relationship that is without regularity.
Over time, Workers' Compensation Courts in New Jersey have considered a variety of services provided to a homeowner. These include the following: childcare; snow removal; carpentry work; painting; home repairs; home renovation/remodeling; clearing debris; cooking; cleaning; sewing; nursing care; and activities associated with assisted living. Factual issues in dispute often include the following: nature and extent of services provided; duration and frequency of services provided; direction and control by a homeowner over services performed; proof of monetary exchange; and expectation of continued future services. In the event that Court testimony becomes necessary, a Judge of Compensation will be required to assess the credibility of the fact witnesses.
In summary, services provided to a homeowner can make daily life more manageable. However, there can be unintended consequences. The actions of a homeowner may result in the establishment of an employment relationship. Moreover, the occurrence of an accident involving a provider of services to a homeowner may result in a compensable workers' compensation claim. Depending upon the outcome of same, a homeowner may ultimately be faced with an increase in the amount of his or her insurance premium.
Disclaimer: The contents of this post are for informational purposes only, are not legal advice and do not create and attorney-client relationship.
For more information please contact Stephen P. Yuhas at syuhas@wglaw.com or 973.242.2704