Recent Trends in Pennsylvania Employment Law: Pennsylvania Supreme Court Continues to Broadly Define the Parameters of “Employment”

Although we usually dedicate our News Posts to wage and overtime rights law, it remains important for Pennsylvania wage/overtime lawyers to read and understand all of the employment rights opinions issued by the Pennsylvania Supreme Court. That’s because, over the course time, concepts and principles developed in cases decided in one specific area of employment law often impact other areas of employment law. So, today, we’ll focus on two recent Pennsylvania Supreme Court opinions addressing the “scope of employment” under the State’s unemployment and worker’s compensation statutes.

The first opinion is entitled A Special Touch v. Commonwealth of Pennsylvania, 228 A.3d 489 (Pa. 2020). A copy of the opinion is available HERE. In Special Touch, the the State contended that a nail salon had failed to pay unemployment taxes for nail technicians and maintenance personnel that the salon classified as non-employee “independent contractors.” The Commonwealth disagreed with this classification and asserted that the workers were covered “employees” under the Unemployment Compensation Law, which provides: “Services performed by an individual for wages shall be deemed to be employment subject to this act, unless and until it is shown to the satisfaction of the department that — (a) such individual has been and will continue to be free from control or direction over the performance of such services both under his contract of service and in fact;  and (b) as to such services such individual is customarily engaged in an independently established trade, occupation, profession or business.” See 43 P.S. § 753(l)(2)(B) (emphasis supplied). Interpreting prong (b) of this statutory requirement, the Supreme Court held “that the phrase ‘customarily engaged’ . . . requires that an individual actually be involved, as opposed to merely having the the ability to be involved, in an independently established trade, occupation, profession, or business.” 228 A.2d at 505-06 (emphasis supplied). In so holding, the Court emphasized the remedial purpose of the Unemployment Compensation Law, see id. at 503, as well as the plain meaning of the statutory language, see id. at 503-04. Special Touch represents a huge victory for Pennsylvania workers who are labeled “independent contractors” even though they spend all of their time working for a single company and do not actually operate their own businesses.

The second opinion is entitled Peters v. Worker’s Compensation Appeal Board (Cintas Corp.), __ A.3d __, 2021 WL 5349146, 2021 Pa. LEXIS 4002 (Pa. Nov. 17, 2021). A copy of the opinion is available HERE. In Peters, a sales representative attended “an Employer-sponsored event at a pub in Allentown” after he made his last sales call of the day. After the event, he allegedly was injured in a car accident on his way home. He sought worker’s compensation benefits for the injuries, asserting that the accident occurred during the course of his employment. See Slip. Op. at 2. As in Special Touch, the Court emphasized that the underlying statute — here the Pennsylvania Worker’s Compensation Act — is remedial legislation to be read liberally in workers’ favor. See Slip. Op. at 15 and 24. Then, after reviewing the pertinent caselaw, see Slip. Op. at 17-24, the Court adopted the following rule: “Therefore, to effectuate the humanitarian purpose of the Act, a traveling employee must be considered in the course of his or her course of employment during the entirety of work-related travel unless the employee abandons his or her employment.” Id. at 24. On remand, this rule will give the salesman a fighting chance, since, in many jobs, “the act of traveling, in and of itself, furthers the business and affairs of a traveling employee’s employer.” Id. “So too do the activities incidental to travel such as lodging, refueling, and stopping for food and drink.” Id.

In sum, Special Touch and Peters demonstrate that the Pennsylvania Supreme Court is open to consider broadening the parameters of “employment” under statutes enacted with the remedial purpose of benefiting Pennsylvania workers. This is good news because far too many Pennsylvania employers are circumventing employment rights laws by, among other tactics, mis-classifying workers as independent contractors and paying workers through third-party staffing agencies, subsidiaries, and sub-contractors.

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