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Frequently, an entrepreneur is faced with a situation when a person working for the entrepreneur injures another or him/herself while on the job. The dilemma is who is responsible to pay for such injuries. The answer will often depend on the doctrine of respondeat superior and a determination of whether the servant is legally considered an employee or an independent contractor.

Suppose you own an interior design business. You have hired Hilary to make deliveries for you. Hilary uses the firm’s vehicle to complete the tasks. You pay her minimum wage for her services. One day, while on a delivery for you, Hilary gets in a car wreck with Mike. The wreck is Hilary’s fault and she has caused Mike personal injury and property damage. Hilary has also sustained her own injuries. Will you be liable to Mike for Hilary’s negligence? Is Hilary responsible for her own injuries or is she entitled to worker’s compensation?

It is necessary to determine whether Hilary is an employee or independent contractor. An independent contractor will be responsible for her own medical bills and would most likely be excluded from worker’s compensation coverage. An independent contractor would be solely liable for Mike’s damages. However, while an employee would most likely be covered by worker’s compensation, your firm would be vicariously liable for Mike’s damages.

One must apply the right of control test to differentiate between employes and independent contractors. Several factors may be considered under the right of control test:

• Under the work agreement, how much control may the master (business owner) exercise over the details of the work?

• Are special knowledge and skills required to perform the work?

• Is the work performed by the servant the type of business in which the master regularly engages or is the work distinct from the regular business of the master?

 

• Is the type of work performed usually done by a specialist without any type of supervision or is it usually performed under the master’s supervision?

• Did the servant supply her own instruments or tools to complete the work?

• Did the servant supply the place for the work to be performed or was it performed on the master’s premises?

• How long is the servant employed? Is the servant employed as long as it is necessary to complete a job or indefinitely?

• Is the servant paid by the job or by the time?

• Do the parties believe they are creating an employment relationship?

Answering just one of these questions affirmatively will not automatically make someone an employee. Rather, one must look at the totality of the circumstances and balance out these factors.

In Hilary’s case, the firm does not exercise much control over the details of how Hilary makes her deliveries; rather, she chooses her routes. However, your firm does specify when Hilary must make deliveries. Hilary also uses the firm’s car to complete the work. Your firm is paying Hilary by the hour and her employment is indefinite. Additionally, your firm directs the time Hilary must complete the work, it is not work that requires any special knowledge or skills, and it is not the type of work that needs to be completed by a specialist. These factors weigh heavily toward the conclusion that Hilary is an employee. Therefore, your firm would be responsible for the injuries Hilary caused while on a delivery for your firm and worker’s compensation would most likely cover Hilary’s injuries.