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Legal Memorandum: Immunity of an Employer of an Independent Contractor

Issue: Is the employer of an independent contractor immune under the Workers’ Compensation Act from suits brought by employees of the contractor?

Area of Law: Employee Law, Workers Compensation Insurance
Keywords: Immunity of an employer of an independent contractor; Workers' Compensation Act
Jurisdiction: Virgin Islands
Cited Cases: 923 F.2d 1062; 311 F.3d 237
Cited Statutes: Section 284 of the Workers' Compensation Act; 24 V.I.C. § 284(b); § 303(a) of the Pennsylvania Workmen's Compensation Act
Date: 04/01/2006

Section 284 of the Workers’ Compensation Act provides in relevant part:

For purposes of this section, a contractor shall be deemed the employer of a subcontractor’s employees only if the subcontractor fails to comply with the provisions of this chapter with respect to being an insured employer.  The “statutory employer and borrowed servant” doctrine are not recognized in this jurisdiction, and an injured employee may sue any person responsible for his injuries other than the employer named in a certificate of insurance.

24 V.I.C. § 284(b) (emphasis added). 

The Virgin Islands Legislature has “clarified that an employee of an independent contractor is not immune from suit simply because the contractor is protected by the exclusivity provision of the [workers’ compensation statute].”  Gass v. V.I. Tel. Corp., 311 F.3d 237, 245 (3d Cir. 2002).  In Gass, the Third Circuit Court of Appeals observed that § 284 was required to correct judicial interpretation of the workers’ compensation statute to allow not only the employer but also the employer’s employer immunity from suit.  Id. at 245.  Amerada Hess, one of HOVENSA’s parents, was named in the legislative history, cited by the Gass court, to illustrate the problem.

Take a situation where a [contractor’s] employee is injured at Hess.  Under the present law, the Courts say our Legislature intended not only to grant immunity to the injured worker’s employer . . ., but also to Hess.  The Bill would avoid that. . . .  [I]f the [contractor’s] employee is badly hurt as […]

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