The Employer-Employee Relationship

• Jurisdiction: Maryland

III. THE EMPLOYER-EMPLOYEE RELATIONSHIP

A. Presumption

An individual is presumed to be an employee covered by the Workers' Compensation Act while in the service of an employer under an express or implied contract of hire. To overcome the presumption, the employer must establish that the individual was an independent contractor under common law rules or was specifically exempted from coverage under the Act.⁴²

B. Criteria

The Supreme Court of Maryland, in cases such as Edith A. Anderson Nursing Homes, Inc. v. Walker,⁴³ has developed the following list of factors to be applied in determining the existence of an employer-employee relationship:

a. The selection and engagement of the servant;
b. The payment of wages;
c. The power of dismissal;
d. The power of control over the servant's conduct;
e. Whether the work is part of the regular business of the employer;
f. Whether the parties believed they were creating the relationship of master and servant;
g. Whether the work is usually done, in the environment, under the direction of the employer or by a specialist, without supervision; and
h. The skill required in the occupation.

The court has stated, however, that none of these elements alone is decisive, except the power of control.⁴⁴

These criteria are often applied in cases where a worker works for more than one person as a result of being borrowed or hired from one to the other. Depending on the facts of the particular case, the worker may be found to be the employee of the general (original) employer, the special employer who borrowed or hired the employee or both of them.⁴⁵

The Commission is empowered to determine liability among co-employers by interpreting and applying any contracts or agreements between them.⁴⁶ Although the co-employers may agree that one of them is primarily liable for payment of workers' compensation benefits, the other would remain secondarily liable since neither employer is permitted to completely contract away its duties under the Act.⁴⁷

If an employer wishes to assert that another party was an employer, it should do so promptly; if it waits too long, it may be estopped from raising that issue.⁴⁸

? Employers should be advised that if they are uncertain whether there might be an employer-employee relationship or whether the employment relationship might be covered by the Workers' Compensation Act, insurance protection must be obtained.

C. Independent Contractors

1. Definition

An independent contractor has been defined as:

one who contracts to perform a certain work for another according to their own means and methods, free from the control of their employer in all details connected with the performance of the work, except as to its product or result.⁴⁹

Thus, the result in a given case will depend upon the degree of supervision exercised over the worker.

Even if the employer has only some ability, should they care to exercise it, to tell the worker what to do and how and when to do it, the worker is considered an employee rather than an independent contractor.⁵⁰

The fact that the worker signed a form stating that he or she was an independent contractor or a sole proprietor is not sufficient to establish that status if the facts and circumstances show that he or she was actually an employee.⁵¹

2. Reservation of right to supervise or inspect

The mere fact that the employer reserves a right to supervise or inspect the work during its performance does not make the contractor a servant where the mode and means of performance are within the control of such contractor. Neither does the right of the employer to go upon the premises and see that the work is being done according to the specifications of the contract.⁵²

3. If worker is a specialist

In cases where the worker was a specialist who performed services requiring personal skill and technical knowledge not common to the one employing them so that they were not subject to direction or supervision as to the details of the work, the courts have generally found them to be an independent contractor.⁵³

D. Employments Subject to the Workers' Compensation Act

Once an employer-employee relationship is established, the parties will be subject to the Workers' Compensation Act⁵⁴ unless they fall within one of the few exceptions described in LAB. & EMPL. §§ 9-205 to 9-236. All of these are self-explanatory except casual employment, which has by far given rise to the most litigation.⁵⁵

1. Casual employment

This is defined generally as employment that is irregular, unpredictable, sporadic, and brief in nature.⁵⁶ The following criteria have been developed by the Supreme Court of Maryland to determine whether a particular employment falls within this definition:

a. Nature of the work;
b. Duration of the employment;
c. Whether the employment is occasional, incidental, or accidental;
d. Whether the work is normal concomitant of the employer's business; and
e. Nature of the contract of employment.⁵⁷

The issue of casual employment is to be determined with principal reference to the scope and purpose of the hiring rather than with sole regard to the duration and regularity of the service.⁵⁸

Where the facts and circumstances show an agreement or arrangement, continuous in nature, calling for the worker to work for the employer as and when the particular and essential requirements of the business demand, the employment is not casual.⁵⁹

2. Elective coverage

When an employment relationship is one which is not subject to the Act, the employer and employee may jointly elect to be covered by the Act by filing such an election with the Commission.⁶⁰ This includes domestic servants earning less than $1,000 in a calendar quarter, who otherwise would not be covered employees.⁶¹

Similarly, a sole proprietor or a partner may elect to be deemed an "employee" so as to be covered by the Act, but in addition to filing the election with the Commission, the sole proprietor or partner must serve the election upon his or her insurance carrier.⁶²

Officers of close corporations, professional corporations, and...