Individuals as Independent Contractors or Employees in Nebraska: An Examination of \u3ci\u3eLarson v. Hometown Communications, Inc.\u3c/i\u3e, 248 Neb. 942, 540 N.W.2d 339 (1995)

Determining whether an individual is an employee or an independent contractor is of primary importance when the individual is injured while performing assigned or contracted work. Under Nebraska law, an employee who is injured in the course of her employment is entitled to compensation from the employer. Once an injury occurs in the course of work, the injured individual has an incentive to argue that she is an employee. If her argument is accepted, she will be entitled to receive compensation from her employer or, more likely, the employer’s insurance provider. The employer or employer’s insurance provider has an opposite incentive: they want the individual classified as an independent contractor so they may avoid liability for the injury. The Nebraska Supreme Court in Larson v. Hometown Communications, Inc. addressed these two competing interests. The court in Larson clearly establishes a ten-factor analysis as controlling in determinations of employee or independent contractor status. Larson stands apart from other holdings because it emphasizes how each factor of the test should be applied to the facts, the clearest application of issues concerning employee/independent contractor analysis to date. Part II of this article sets out the facts of this case. Part III describes the background of the statutory analysis, the development of the ten-factor test, and the background of the substitute employee doctrine. Part IV is an analysis of the court’s reasoning concerning the statutory analysis, the ten-factor test, and the substitute employee doctrine. Part V concludes by summarizing the holding in Larson and by noting that the holding is a logical extension of past precedent