12.2.6.1 Statutory Employers

• Jurisdiction: Arizona

. A majority of states, including Arizona, by statute extend employer immunity to a general contractor who could be liable for workers’ compensation benefits to employees of an uninsured subcontractor.^[106] The mechanism by which immunity is extended is called the “statutory employer’’ or “contractor-under’’ statute.^[107]

In Arizona, the statutory employer concept is found in of A.R.S. § 23-902 (B), which states:

When an employer procures work to be done for him by a contractor over whose work he retains supervision or control, and such work is a part or process in the trade or business of the employer, then such contractors and the persons employed by him . . . are . . . employees of the original employer.

(Emphasis added.)

The purpose of this statute is to prevent the evasion of responsibility for workers’ compensation insurance by a general contractor who parcels out its own work to subcontractors who are uninsured.^[108] The injured employee of an impecunious subcontractor can thereby obtain workers’ compensation coverage through the general...