Did Va. Remodeler’s Small Size Insulate it from Workers’ Comp Claim?

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To fall under the workers’ compensation act, a Virginia employee must have three or more employees. But does that include subcontractors, or workers who are only involved on projects for short periods? A case involving an employee injured when a concrete wall collapsed on him sheds light on those issues.

The claimant worked for Gencon, a general contracting business that remodeled homes. The Workers' Compensation Commission awarded him temporary total disability and medical benefits through the Uninsured Employer's Fund because Gencon lacked workers’ compensation coverage. 

The problem was, Gencone had just two main employees: Perez and Lemus, who handled demolition, carpentry, and painting. The Virginia Workers’ Compensation Act covers injuries where the employer has three or more employees. 

Gencon used subscontracts on more than half its projects, though. Each subcontractor was considered a statutory employee. Whenever "we need extra help, the boss calls extra people,” Lemus said. These extra workers were:

• Carlos, the carpet installer, and his wife
• Peter, the electrician
• Santos, the drywall installer
• A countertop crew
• Paul and an assistant, the cabinet installers

The subcontractors were present for maybe three to six hours on the days they worked. However, there were almost never three or more people working at a jobsite.

The Uninsured Employers' Fund claimed the Commission didn’t have authority to award benefits because Gencon only had two employees.

In Virginia, an employer that has regularly in service less than three employees generally is not subject to the workers’ compensation statute. Courts interpret “employee” to mean any person hired by the employer to work in the usual course of the employer's business, regardless of how often or for how long he may be employed.

Did the Industrial Commission have authority to award claimant benefits?

A. Yes. On a regular basis, there were three or more employees working for Gencon.

B. No. The subcontractor employees needed to meet the three-employee threshold were present only for a short time on any one project. 

If you selected A, you agreed with the court in The Uninsured Employer’s Fund v. Perez,  No. 1598-24-4  (Va. Ct. App. 02/24/26), which found that Gencon was a covered employer.

Need to know who's an "employee" in your state? Simply Research covers it.

The court acknowledged that Carlos and his wife, Paul and his assistant, and the countertop crew did not take long to complete their work. However, that work was still required on more than half of Gencon's contracts

Indeed, Lemus testified that for as long as he had worked for Gencon, whenever "we need extra help, the boss calls extra people," the court said.

Gencon regularly needed the subcontractors to perform its remodeling/ It didn’t how long or how often they were actually at the jobsite.

The court affirmed the Commission's determination that Gencon had three or more employees regularly in service at the time of the accident. Accordingly, it upheld the award of benefits to the claimant.

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