COA holds that lawn care worker is an independent contractor under the Michigan Worker’s Compensation Act
In Auto-Owners Insurance Co. v. All Star Law Specialists Plus Inc., the Michigan Court of Appeals held that a lawn care worker who performed lawn care services for his neighbors as well as for the lawn care company was an independent contractor under the Michigan Worker’s Compensation Act and therefore was not entitled to worker’s compensation benefits. The worker suffered injuries when a leaf blower he was using tipped over, and he sought compensation from his employer, who in turn sought compensation under its worker’s compensation, general liability, and automobile insurance policies. A 1992 Court of Appeals case interpreted the Worker’s Compensation Act, MCL 7.215(J)(A), to define workers as independent contractors if they either “maintain a separate business,” “hold [themselves] out to and render service to the public,” or are “an employer subject to this act.” Here, the Court of Appeals followed this interpretation and held that the worker was not an employee because he held himself out to render service to the public. The court noted, however, that it disagreed with this interpretation and if it was free to hold differently, it would hold that a worker must satisfy not one but all three conditions listed in the statute to be considered an independent contractor.
The court also held that various exclusions to the employer’s general liability and automobile policies did not apply, but that a “parked vehicle” exclusion to the automobile policy did apply. The court remanded to the trial court in order to determine whether the worker was an employee or an independent contractor under the economic reality test, which will determine whether the employer liability exclusions to the worker’s compensation and general liability policies apply.