Workers' Compensation Board decision raises questions about compensability of drivers under a lease.

Published Tuesday, September 10, 2019

By Julie Masters, attorney with SAIF

Oregon workers’ compensation law exempts many truck drivers who own or lease the motor vehicle equipment they drive from workers’ compensation coverage. To be exempt from coverage, the driver must have an ownership or leasehold interest in equipment, and the driver must furnish, operate and maintain the equipment. A recent Workers’ Compensation Board case may have changed that for drivers who lease the equipment they drive. The Board held that the injured driver of a tractor truck leased from a trucking company was not exempt from coverage by workers' compensation insurance.

The driver in the Board decision leased the truck from a carrier under an agreement that he was an independent contractor, would be paid by the mile, and would be charged back for the truck’s lease and its maintenance. Under the lease, the driver had full possession of and responsibility for the truck, but no ownership interest in it. Following an accident, the driver filed a claim with SAIF for his injuries. SAIF denied the claim, determining the driver met the statutory exemption requirements and was therefore, not a subject employee of the motor carrier. The driver appealed SAIF’s denial and the case went to a hearing. The administrative law judge examined the lease and concluded that the driver met the legal requirements to be exempt from coverage. This meant that the driver was not covered by the carrier’s policy with SAIF.

The driver appealed the decision to the Workers' Compensation Board, which reversed the order, concluding that the driver was a worker subject to workers’ compensation coverage. The Board stated that the exemption for truck drivers under workers' compensation law was very similar to an exemption for truck drivers in unemployment insurance law. The Board relied on similarities between the exemptions in the two laws to decide that the injured driver’s leasehold interest in the truck was not sufficient to allow him to “furnish” it to the carrier. The Board’s order found the driver’s injury to be covered by workers’ compensation.

SAIF has appealed the decision to the Court of Appeals, noting the unemployment insurance exemption has minor but significant differences in wording from the workers’ compensation exemption—which the Board did not reference in their decision. The appeal is expected to take at least a year. In the meantime, the case raises questions about whether trucking companies with this kind of arrangement should be paying workers’ compensation premiums on the drivers—and whether they are noncompliant if they’re not paying those premiums. Talk with your underwriter if you have any questions about how this case impacts your workers’ comp policy.