On February 3, 2010, the Maryland Court of Appeals issued a reported opinion regarding "covered employees" under workers' compensation law in Injured Workers Insurance Fund v. Orient Express Delivery.
The Injured Workers Insurance Fund (“IWIF”) is a quasi-governmental entity that issues workers compensation insurance policies. Orient Express Delivery purchased a policy from IWIF. Litigation was initiated by IWIF when a premium audit was conducted and Orient Express Delivery alleged that most of the delivery drivers were independent contractors who were not “covered employees” under Maryland compensation law, and, therefore, were not obligated to be covered by the policy issued to Orient Express Delivery by IWIF.
In reviewing a grant of summary judgment by the trial court in favor of Orient Express Delivery for procedural reasons, the Court took some lengths to review the law. The Court invoked the Workplace Fraud Act of 2009 as creating a presumption that workers were "covered employees", and reiterated that "control" of the worker is the operative determining factor for courts to consider. "[T]he ability, or lack thereof, to control the worker is the cornerstone of independent contractor status".
The Court succinctly articulated the Maryland statutory scheme:
“The Maryland Workers’ Compensation Act (“Act”) requires all employers to obtain workers’ compensation insurance for “covered employees.” Md. Code (1991, 2008 Repl. Vol.), Labor & Employment Article (“LE”), § 9-402(a). Employers must pay workers’ compensation benefits to any “covered employee” who suffers accidental personal injury arising out of and during the course of employment. LE § 9-501. In determining who is a “covered employee,” courts and the Workers’ CompensationCommission apply the common law definition of the employer-employee relationship, which looks to five factors or criteria: (1) whether the employer selected or hired the worker, (2) whether wages were paid to the worker, (3) whether the employer had the ability to discharge the worker, (4) whether the employer has the ability to control the worker’s conduct, and (5) whether the worker’s work is part of the employer’s regular business.”
Orient Express Delivery placed much of its argument on the signing of sole proprietor status forms by the drivers. The Court rejected this argument. The signing of forms as an affirmative election was viewed as not dispositive of the issue under any circumstance. The Court referenced the remedial nature of the statute and the no-fault benevolent purpose of the workers' compensation law to protect workers.
