SIGNIFICANT CASE SUMMARY

Virginia Case Summary

The Uninsured Employers’ Fund v. Jose A. Zacarias Perez
No. 1598-24-4
February 24, 2026

Decided: Feb. 24, 2026

Employer had three or more employees under Virginia Code § 65.2-101 based on its regular use of subcontractors’ workers and was therefore required to maintain workers’ compensation insurance.

Facts

Gencon was a sole proprietorship in the business of remodeling and had two employees, Claimant and Nester Lemus. Gencon regularly hired subcontractors to complete its projects. In May 2021, Gencon hired four subcontractors, two of which used additional assistants. In total, the project was completed by eight or nine tradespeople with the non-Gencon workers completing their tasks within four days. In July 2021, Gencon enlisted the assistance of three subcontractors with additional assistants. This project was completed by seven tradespeople with the non-Gencon workers completing their tasks within a day. In September 2021, Gencon used four or five subcontractors to complete a project, who completed their work within two days. Gencon completed additional, smaller projects throughout 2021 for which they continued to use subcontractors. Claimant sustained multiple injuries while working on the September 2021 project. As a result, he filed a workers’ compensation claim seeking temporary total disability, medical-bill reimbursements, and a lifetime medical award. However, Gencon did not have workers’ compensation insurance. In dispute was “whether Gencon had three or more employees ‘regularly in service’” to require the business to have workers’ compensation insurance. Deputy Commissioner Kennard found that Gencon did not have the requisite number of employees to require workers’ compensation insurance and Claimant’s claims were denied. Claimant requested review by the full Commission, which reversed Kennard’s decision. The Commission found that Gencon regularly used subcontractors who enlisted the assistance of others. On remand, Kennard awarded Claimant’s claim and the Commission affirmed.

Holding

The Court held that the Commission properly considered the subcontractors’ assistants to be statutory employees under Gencon’s business practices. Virginia Code § 65.2-101 has been construed to include as an employee any person hired to work in the usual course of the employer’s business, regardless of the frequency or length of their employment. Gencon’s projects regularly required three or more employees. The fact that three or more workers were not present on the jobsite on most days did not matter.

Takeaway

An employer with less than the statutorily required employees under Virginia Code § 65.2-101 may nonetheless be considered to have three or more employees if it is their practice to regularly utilize subcontractors with their own employees. This should be kept in mind when deciding whether there is a need to maintain workers’ compensation insurance.

Questions about this case can be directed to Jamie DeSisto, at 443.641.0558 or jdesisto@tthlaw.com