Is a state-licensed foster parent an employee or an independent contractor under the terms of the New Jersey Workers' Compensation Act?

The petitioner, a foster parent licensed in the state of New Jersey, filed a claim with the Division of Workers' Compensation after falling on the stairs during a foster parent training program presented by the respondent, a private, non-profit organization that contracts with the state to place children in foster care. At the time of her accident, the petitioner had been associated with the respondent for approximately six years and had one foster child in her care. The respondent filed an answer denying the petitioner's claim and brought a motion to dismiss, asserting the petitioner was not their employee but, rather, an independent contractor ineligible for workers' compensation benefits. The judge of compensation granted the respondent's motion and dismissed the petitioner's claim. The petitioner appealed. In affirming the judge's dismissal, the Appellate Division relied primarily on Lesniewski v. W.B. Furze Corp., 308 N.J. Super. 270 (App. Div. 1998). In Lesniewski, the court utilized two separate and distinct tests – i.e., the "control" test and the "relative nature of the work" test – to determine whether a petitioner was an employee eligible for workers' compensation benefits or, alternatively, was an ineligible independent contractor. The "control" test focuses on four factors: "(1) Degree of control exercised by the employer over the means of completing the work; (2) Source of the employee's compensation; (3) Source of the worker's equipment and resources; and (4) Employer's termination rights." Here, the petitioner herself maintained control over the day-to-day care of her foster child. She utilized her own home, was furnished with no equipment to be used in providing foster care, and received no compensation beyond reimbursement for the expenses she might incur in providing that care. Perhaps most significantly, the petitioner was not subject to termination by the respondent itself. Rather, as a state-licensed foster parent, only the state had the right to terminate the petitioner's status as a foster care provider. The Appellate Division's analysis of the "relative nature of the work" test yielded similar findings. Under this test, an employer-employee relationship exists if a "substantial economic dependence" upon the employer is shown, as well as a "functional integration" of their respective operations. "Although Petitioner's 'work' could theoretically be considered an 'integral' part of the [Respondent's] regular business," the Appellate Division reasoned, "Petitioner's [ability to demonstrate] financial independence was required in order for her to receive a foster child into her home" in the first place. Accordingly, the Appellate Division concluded that the petitioner's contention that she was financially dependent upon reimbursement from the respondent for her own livelihood was wholly without merit and contrary to her status as a state-licensed foster parent.

Case Law Alert - 4th Qtr 2011