Have you heard this one before? This is a story involving Company A (general contractor), Company B (subcontractor 1), Company C (subcontractor 2) and an injured worker. Company A enters into an agreement with Company B for Company B to do some work on a construction project. Company B enters into a separate agreement with Company C to perform some portion of that construction project. During the performance of Company C’s portion of the construction project, one of Company C’s employees, the claimant, gets injured on the job. Who do you think would have exposure for the claimant’s potential workers’ compensation claim? If you said Company C, you would be partially correct. Depending on some key facts, the answer may actually be Companies A, B and C. While Company C is the entity that would traditionally be considered the claimant’s employer and would therefore have exposure for the claimant’s work injury, there are provisions of the Pennsylvania Workers’ Compensation Act under which Company A or Company B could also have exposure for the claimant’s work injury if certain important things are present in the case. Depending on the facts of the particular case, Sections 302(a) and 302(b) of the Pennsylvania Workers’ Compensation Act are two such provisions that could ultimately lead to Company A and Company B being held liable for the claimant’s work injury as the claimant’s statutory employers if they satisfy the requirements of either Section 302(a) or 302(b).

Definition of ‘Statutory Employer’

“A statutory employer is a master who is not a contractual or common law one, but is made one by the Pennsylvania Workers’ Compensation Act.” See Peck v. Delaware County Board of Prison Inspec­tors, 814 A.2d 185 (Pa. 2002). An entity cannot be both a direct employer and a statutory employer, as in American Road Lines v. Workers’ Compensation Appeal Board (Royal), 39 A.3d 603 (Pa.Cmwlth. 2012). Although statutory employers are often found in the context of construction cases, they can also be found in other situations as well.

Statutory Employer Test Under Section 302(a) (77 P.S. 461) 

  • Coverage of employees of subcontractor; subcontractor defined; exception

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