Recent news tells us the State of New Jersey is charging Uber $242 million in back taxes and has ruled that they have misclassified their contractors as employees. Once again, the question of who is or isn’t an employee is on the minds of many workers’ compensation attorneys, as well as many who have been classified as independent contractors in the past.
This gives us a timely opportunity to explore other people who perform labor outside of the traditional confines of a regular full or part-time job with benefits.
At first blush it might seem obvious that volunteers should receive protections for their unpaid labor on behalf of the community. Many volunteers certainly do not stop to wonder whether they’re covered by workers compensation. Human nature ensures most of us don’t think about the worst until it happens. It also ensures a sense of trust, a vague idea that if one gets hurt while volunteering they’ll get taken care of because they are doing good.
In reality, the laws surrounding workers compensation and volunteerism are complex, and leave holes an organization could use to avoid responsibility for injuries taken while performing volunteer labor.
In New Jersey, the question that comes up when attempting to classify someone as an employee is whether they receive and expect “consideration” in return for their work.
Consideration does not have to be money. Precedent has established that room and board can serve as consideration, as can education and training. For example, in the 1948 case Heget v. Christ Hospital, “vocational training” was classified as a form of consideration.
The law has also already ruled certain classes of volunteers must be insured. These are all municipal positions, including:
- Volunteer firefighters
- Volunteer rescue workers, rangers, first aid providers, ambulance drivers, etc.
- Elected and appointed officials.
- Members of the Board of Education.
Though one may not think of them as volunteers, auxiliary and reserve police officers also retain these special protections.
Private organizations and nonprofits have a lot more leeway. In 2012 a New Jersey compensation judge ruled that a thrift store volunteer injured on the job was not entitled to worker’s compensation benefits. The case was Vasiliki Rallatos vs. The ARC of Atlantic County.
This case further defined consideration as: “A benefit conferred as an inducement to a commitment.” They ruled that the 50% discount Rallatos received for her volunteer work did not count as consideration. In part this is because she admitted she probably would have worked without the discount, but the judge based the decision on other factors too. For example, the judge noted that the IRS does not consider discounts to be taxable.
The IRS does tax barter, so there are examples of non-monetary considerations or exchanges that tax officials do pursue.
Before you let the absence of workers compensation scare you off volunteer work forever, be aware the knife cuts both ways. Workers compensation specifically shields employers from liability. This means no employee can file a personal injury suit against a negligent employer.
If a volunteer is not covered by workers compensation, then one could conclude that the volunteer would then be free to pursue a personal injury claim instead.