The Virginia Workers’ Compensation Commission correctly determined that the injured worker was a subcontractor’s employee, and not an independent contractor.
Statement of the case
“Dionel Espino fell from a ladder and injured his foot. He sought recovery under the Workers’ Compensation Act from his employer, Gerardo Reyes, who was a subcontractor of Alpha y Omega Services, LLC (‘Alpha’), a subcontractor of Modern Renovations, LLC.
“We affirm the Virginia Workers’ Compensation Commission’s conclusion that Espino was an employee, not an independent contractor, of Reyes, and therefore of Modern Renovations.
“And we find no fault in the Commission’s decision not to consider a willful misconduct defense Modern Renovations elected not to raise before the deputy commissioner. Modern Renovations’ other arguments are just as unavailing.”
“Reyes met Espino, learned he was unemployed, and hired him to work on a roofing job. At his deposition, Reyes described himself as an employee of Alpha and said Espino was also an employee of Alpha, although Alpha only directly paid Reyes.
“Reyes would drive Espino and several other roofers to the job site each day in his pickup truck. He supplied the required tools for the job and paid each roofer, including Espino, $200 a day.
“Reyes never met anyone from Modern Renovations before Espino’s accident, and Alpha never told him who was paying Alpha for the job. Modern Renovations admits that they subcontracted the roofing work to Alpha and alleges that Alpha’s owner ‘skipped town’ and took no responsibility for the accident.
“All the people and entities involved were uninsured. Modern Renovations previously had workers’ compensation insurance coverage but it was cancelled due to nonpayment. While they restarted the policy effective September 1, 2020, this was after Espino’s injury took place.
“The Commission found that Espino had an employer / employee relationship with Reyes and that Espino suffered an injury which arose from and during his employment for Reyes. The Commission further found that Reyes was a subcontractor to Alpha, and that as such, Alpha was the claimant’s statutory employer at the time of the claim.
“Finally, the Commission found that Alpha was a subcontractor of Modern Renovations, making Modern Renovations a statutory employer of Espino.
“The Commission awarded Espino an award of temporary total disability and lifetime causally related medical benefits. Because Alpha’s owner left the country after the accident, Espino could not pursue benefits from Alpha.
“This appeal follows.”
A workers’ compensation claimant must establish that he is an employee to be awarded benefits. Determining whether a worker is an employee or an independent contractor requires examination of the facts and circumstances of the case.
“In determining ‘whose is the work and where is the power of control,’ the deciding body may look to the ‘(1) selection and engagement of the [employee]; (2) payment of wages; (3) power of dismissal; and (4) the power of control of the [employee’s] action.’”
The “power of control” is the most significant factor. “The right of control includes not only the power to specify the result to be attained, but the power to control ‘the means and methods by which the result is to be accomplished.’ …
“In concluding that Espino was an employee of Reyes, the Commission relied on these facts: Reyes drove Espino to the job site, told him what to do and where to do it, and provided him with most of the necessary materials and equipment.
“Reyes also hired Espino and paid his wages. Accepting these factual findings, we find no error in the Commission’s conclusion that Espino was an employee and not an independent contractor. …
“Because Modern Renovations has not challenged the Commission’s conclusion that Alpha was Reyes’ statutory employer, or that Modern Renovations subcontracted Alpha for the roofing job, Code § 65.2-302(A) applies and Modern Renovations is ‘liable to pay to any worker employed in the work any compensation under this title which he would have been liable to pay if the worker had been immediately employed by him.’”
Willful misconduct defense
At the hearing before the deputy commissioner, Modern Renovations’ counsel noted that a willful misconduct violation was not alleged. However, Modern Renovations wanted to raise this defense in its appeal to the commission. The commission ruled “that ‘[a]rguments raised for the first time on review will not be considered by the Commission’ and cited several decisions of the Commission in support of this ruling. …
“To start, our Court defers to the Commission in interpreting its own rules.” Modern Renovations did not argue that it complied with statutory notice requirements relating to a willful misconduct offense.
“Instead, Modern Renovations relied on Rule 3.1, which affirms that the ‘Commission may, however, on its own motion, address any error and correct any decision on review if such action is considered to be necessary for just determination of the issues.’
“Rule 3.1 is permissive, and not mandatory. Even if it were mandatory, we have no trouble concluding that it would not require the Commission to consider a late-raised willful misconduct defense where the employer (1) bears the burden of proof, (2) failed to give the required notice under Rule 1.10, and (3) never petitioned the Commission to reopen the record to present additional evidence[.]”
An employer of three or more employees must carry workers’ compensation insurance. Modern Renovations argues that the commission erred by finding Modern had three or more qualifying employees.
“But we agree with the Commission that it was Modern Renovations’ burden to establish it did not have three qualifying employees.”
Modern Renovations v. Espino, et al. Record No. 0455-22-4, Oct. 25, 2022. CAV (Lorish). From the Virginia Workers’ Compensation Comm’n. Berwin Cohen for appellant. Andrew S. Kasmer for appellee Dionel Sagastume Espino. Joseph F. Giordano for appellee Uninsured Employer’s Fund. No brief or argument for appellee Gerardo Reyes. No brief or argument for appellee Alpha y Omega Services, LLC. VLW 022-7-485, 10 pp.