Case name: SAIF Corp. v. Department of Consumer and Business Services Insurance Division, No. A147036 (Or. Ct. App. 06/06/12).
Ruling: The Oregon Court of Appeals remanded a case for application of both the "right to control" test and the "nature of the work" test to determine whether workers were employees of a theater entitled to coverage under workers' compensation.
What it means: In Oregon, both the right to control and the nature of the work tests should be used to determine whether workers employed by an employer are employees for whom the employer is obligated to provide workers' compensation insurance.
Summary: A children's theater provided workers' compensation insurance to 13 employees. It considered other workers, including instructors, instructional assistants, production designers, and actors to be independent contractors. An audit by the theater's insurer determined that all of the individuals employed by the theater should have been covered under workers' compensation. The Department of Consumer and Business Services decided that the right to control test established that the instructors, production designers, and actors were independent contractors and that the nature of the work test was inapplicable. The Oregon Court of Appeals held that both tests were applicable and remanded the case.
The court explained that both tests are used to determine whether a worker is an employee of an employer. The court concluded that if there was some evidence that the theater had a right to control instructors, production designers, and actors the department was required to apply both tests.
The court rejected the theater's argument that there was no evidence that it had the right to control its instructors, production designers, or actors. The court explained that the theater's designation of instructors as "independent contractors" in their contracts was not controlling. The theater controlled the services that the instructors provided, the way they conducted their classes, the beginning and ending time of the classes, and which classrooms were used for each class. The theater also observed the classes and had a right to terminate an instructor's employment. The theater required production designers to meet deadline, attend specified meetings and rehearsals, and observe the rules of the building. Actors worked under the control of directors and learned their lines from a script provided by the theater.
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July 16, 2012
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