Back in July I blogged what I assumed was a game changer in MA: in the Ives Camargo case, the MA Supreme Judicial Court ruled that the definition of “employee” under workers comp must be based solely on the language in the comp statute and not from an amalgam of laws ranging from Unemployment Insurance to federal tax law. Suddenly, the Attorney General’s long-standing, three-pronged criteria for determining employment status (PDF) appeared to be insufficient. The determination of whether someone is an independent contractor went from a simple, three-pronged criteria to a nuanced, 12 element analysis based upon a pair of workers comp cases dubbed “MacTavish-Whitman.”
Time for the fireworks to begin
Well So far, there haven’t been any. The Attorney General’s advisory – dismissed as inappropriate in the Ives Camargo ruling – still holds its place of honor at the WCRIBMA website. There have been no changes in the rules, no amended procedures, no new forms and decision-tree charts walking auditors through the new criteria. And most important of all, there have been no visible changes in the way auditors handle uninsured subcontractors: whenever independent contractors opt out of coverage, their payroll is added to the GC’s comp premium.
Here is a related conundrum: carriers routinely collect premium at audit for any uninsured subs, but they are very likely to deny any claims filed by these people. After all, they are not employees! But as an auditor pointed out to one of our agents, a subcontractor with a severe injury may claim to be an employee of the GC. In the course of litigation – win or lose, a substantial cost for the carrier – a judge might determine (presumably using the MacTavish-Whitman criteria) that the individual is indeed an employee. This decision would cost the carrier a lot of money. So there actually is a rationale for both collecting premium and denying claims.
At some point, a MA insured is going to be hit with a big premium bill for uninsured subcontractors. They will appeal, challenging any findings that fall outside the stringent criteria in the Ives Camargo case. Then the long-awaited fireworks will actually begin and just maybe, the game-changing Ives Camargo case will actually change the game.
Senior Workers Compensation Consultant