Homeowners: Are You on the Hook for Repairman’s Injuries?

by Steve Dlott, Esq

The misclassification of employees as independent contractors is a pervasive and worsening problem in the workplace and is no longer a matter that primarily concerns (and excites) lawyers, the IRS and  various state agencies. Witness the plethora of recent headlines involving a California court’s decision finding Uber drivers misclassified as independent contractors. As an article in last Sunday’s (August 2nd) Plain Dealer highlights, however, the misclassification issue is a much more extensive problem than people realize. It may well impact you in that most prized personal possession-your home.

 In the letter appearing in the “Money Matters” column in Sunday’s P.D., a reader expressed concern about hiring home repair and other home maintenance workers. The writer noted the difficulty in finding such workers who carry workers’ comp. coverage. The homeowner very skeptically noted that all of these workers classify themselves as independent contractors, which then exempts them from having to obtain workers’ compensation insurance. The homeowner was greatly concerned that he/she could be financially responsible if one of these workers injured themselves while working at the homeowner’s home.

 As the columnist correctly responded, the homeowner’s concern was well founded. The columnist observed that the homeowner may well be on the hook for any injury a worker he/she hires if that worker is found to be an employee. The columnist strongly recommended that the homeowner insists on proof of workers’ compensation insurance from any general contractor doing work on the homeowners property. While sound advice as far as it went, the columnist’s response was also incomplete and missed a good opportunity to remind homeowners of the need to carry their own workers’ compensation coverage in certain situations.

 The most obvious example is working spouses who employ nannies or other domestic help or caregivers. While an exhaustive list of the criteria for determining whether these workers are considered the homeowner’s employees is beyond the scope of this article, some general guidelines can assist in that determination. First, do these workers work set hours? That is one strong indication of an employer-employee relationship. Equally important is whether specific direction or instruction regarding how the job tasks are to be performed is given. These questions inevitably lead to many gray areas, but the more direction and instruction a homeowner gives to a nanny or caregiver– “put the baby down for nap around this time,”  or give the elderly parent medication at this time and feed them around this time–the more  likely that worker will be considered an employee. In those cases, the homeowner will be financially responsible for any injury that worker sustains. Also note that homeowner’s insurance policies exclude coverage for such work injuries. Under Ohio workers’ comp. law, an employer who does not carry workers’ comp. insurance will be directly liable for every dollar paid out in a claim. For a serious injury, that can be extraordinarily expensive.

 For any question or uncertainty as to whether these rules apply to you, consulting counsel is strongly recommended. An ounce of prevention in this case is more than worth the cost, not to mention the stress, of being on the wrong side of the misclassification law.