Defining Employer Under the Nebraska Workers’ Compensation Act

The first determination that must be made in a workers’ compensation claim is whether there is an employment relationship. To establish an employment relationship there must be (1) an employer, (2) an employee, and (3) a contract of hire, either express or implied. This post deals with defining who can be an employer.

The definition of “employer” for workers’ compensation purposes includes: (1) The state and every government agency created by it, or (2) every person, firm or corporation who is engaged in any trade, occupation, business or profession, and who has any person in service under any contract of hire. Neb. Rev. Stat. § 48-114. Neb. Rev. Stat. § 48-106 specifically provides that railroad companies, employers of household domestic servants and some employers of farm or ranch laborers are excluded from the Nebraska Workers’ Compensation Act. The Act does provide that if an employer is exempt from the act they may elect to bring the employees under the act by obtaining a policy of workers’ compensation insurance covering such employees.

If an agricultural employer elects to not obtain workers’ compensation insurance, it must provide the employee, at the time of hire, written notice alerting the employee to the fact that he or she will not be covered under the Act, and this notice must be signed by the employee and retained by the employer. § 48-106 provides specific language to be included in the written notice. If exempt employers fail to provide notice, they will be subject to liability under the Act.

Additionally, a firm can become a statutory employer under Neb. Rev. Stat. § 48-116. The question of whether an employer is a statutory employer frequently arises in the context of construction projects and common carrier/trucking situations. An owner who employs an independent contractor to do work which is in the usual course of business of the owner, and who fails to require the independent contractor to procure workers’ compensation insurance, is liable as a “statutory employer” shoulder one of the employees of the independent contractor become injured on the job. Franklin v. Pawley, 215 Neb. 624, 340 N.W.2d 156 (1983). The actual employer remains primarily liable and the statutory employer is secondarily liable the statutory employer has a right to indemnity against the actual employer if it is forced to pay benefits.