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Statutory Employer Rule Explained

By: Scotty Edward Chabert Jr.

The statutory employer rule is a legal doctrine that applies when a worker is injured on the job while working for a subcontractor. This rule ensures that a worker still receives workers’ compensation in the event of a workplace injury if they are not classified as an independent contractor or as a common law employee with workers’ compensation under the employer. The subcontractor’s employer is considered to be the statutory employer of the injured worker, even if the worker is not directly employed by the contractor. Your rights may be limited to Workers’ Compensation, but we know how to find the greatest and best rights available to you under Louisiana and Mississippi law. 

The Purpose of the Rule

For instance, if a workplace accident occurs and it’s not the employer’s fault, the statutory rule removes the employer’s ability to defend themselves against a claim. However, the employer is protected from any tort claims, which are lawsuits seeking compensation from the injured party. It’s important to note that this rule doesn’t apply if the employee was a victim of an intentional act.

In the same way, the employee also sacrifices their right to full damages. Instead, they focus on receiving timely compensation for essential needs in the form of indemnity (⅔ wages) and medical bills.

The Statutory Rule in the Louisiana Workers’ Compensation Act 

The Louisiana Workers’ Compensation Act has a rule called the Statutory Employer Defense. This means that when an employee gets hurt at work, they can get compensation from their employer if their relationship with the company meets certain conditions. We can help you navigate the intricacies of this legal issue.

Multiple Employment and Borrowed Employees 

The Louisiana Workers’ Compensation Act also extends workers’ compensation coverage to borrowed employees and workers under joint employers.

Joint Employers

If, at the time of the injury, an employee is both employed and paid by two or more employers, both are responsible for providing the workers’ compensation benefits. 

Borrowed Employees

A “borrowed employee” is someone who works for one employer but is working under another employer for a certain period of time. If the borrowed employee gets hurt at work, both employers are responsible for paying half of the workers’ compensation benefits.

To decide if an employee is a borrowed employee, there are several factors to consider, such as:

  • Who has control over the employee’s work beyond just giving suggestions
  • Who pays the employee’s wages
  • Who can fire the employee
  • Who provides the tools and workplace
  • How long the employee has been working under the new employer
  • Whose work the employee is doing at the time of the accident
  • If there was an agreement between the two employers
  • If the employee agreed to work in the new situation
  • If the original employer gave up control over the employee

These factors all help add clarity to whether or not the employee would be considered a borrowed employee in these circumstances.


It is also important to note that, The Louisiana Workers’ Compensation Act does exclude several types of employees from coverage, including: 

  • Public officials
  • Employees of contractors with the State, its subdivisions, or incorporated public boards or commissions
  • Employees of residential householders 
  • Musicians and performers regarding work under their performance contracts
  • Airplane crews engaged in crop dusting, with regard to the farming operations they are servicing
  • Uncompensated officers or board of director members for charitable organizations 
  • Real estate salespersons and brokers 
  • Landmen working in the acquisition or divestiture of mineral rights
  • Employees covered by the Federal Employer’s Liability Act 
  • Employees covered by the Longshoremen and Harbor Workers’ Compensation Act or its extensions
  • Employees covered by the Jones Act 


Worker’s compensation and statutory rules help protect both employers and employees in the event of workplace accidents and injuries. Because the rules vary by state, it is crucial to check the local requirements wherever you are or may go for work. When a company’s fault causes you injury in Louisiana or Mississippi, let Saunders & Chabert fight for your rights and recovery.

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