North Dakota Administrative Code › Title 92 - Workforce Safety and Insurance › Article 92-01 - General Administration › Chapter 92-01-02 - Rules of Procedure - North Dakota Workers' Compensation Act › Section 92-01-02-49 - Determination of employment

Current through Supplement No. 393, July, 2024
1. Any
				service performed for another for remuneration under any agreement or contract
				of hire express or implied is presumed to be employment unless it is shown that
				the individual performing the service is an independent contractor as
				determined by the "common law" test.
a. An
				employment relationship exists when the person for whom services are performed
				has the right to control and direct the individual person who performs the
				services, not only as to the result to be accomplished by the work but also as
				to the details and means by which that result is accomplished. It is not
				necessary that the employer actually direct or control the manner in which the
				services are performed; it is sufficient if the employer has the right to do
				so. The right to discharge is a significant factor indicating that the person
				possessing that right is an employer. The right to terminate a contract before
				completion to prevent and minimize damages for a potential breach or actual
				breach of contract does not, by itself, establish an employment relationship.
				Other factors indicating an employer-employee relationship, although not
				necessarily present in every case, are the furnishing of tools and the
				furnishing of a place to work to the person who performs the services. The fact
				that the contract must be performed at a specific location such as building
				site, does not, by itself, constitute furnishing a place to work if the nature
				of the work to be done precludes a separate site or is the customary practice
				in the industry. If a person is subject to the control or direction of another
				merely as to the result to be accomplished by the work and not as to the means
				and methods for accomplishing the result, the person will likely be an
				independent contractor. A person performing services as an independent
				contractor is not as to such services an employee. Persons such as physicians,
				lawyers, dentists, veterinarians, public stenographers, and auctioneers,
				engaged in the pursuit of an independent trade, business, or profession, in
				which they offer their services to the public, are independent contractors and
				not employees.
b. In determining
				whether a person is an independent contractor or an employee under the "common
				law" test, the following twenty factors are to be considered:
(1) Instructions. A person who is required to
				comply with other persons' instructions about when, where, and how the person
				is to work is ordinarily an employee. This control factor is present if the
				person or persons for whom the services are performed have the right to require
				compliance with instructions.
(2)
				Training. Training a person by requiring an experienced employee to work with
				the person, by corresponding with the person, by requiring the person to attend
				meetings, or by using other methods, indicates that the person or persons for
				whom the services are performed want the services performed in a particular
				method or manner.
(3) Integration.
				Integration of the person's services into the business operations generally
				shows that the person is subject to direction and control. When the success or
				continuation of a business depends to an appreciable degree upon the
				performance of certain services, the persons who perform those services must
				necessarily be subject to a certain amount of control by the owner of the
				business.
(4) Services rendered
				personally. If the services must be rendered personally, presumably the person
				or persons for whom the services are performed are interested in the methods
				used to accomplish the work as well as in the results.
(5) Hiring, supervising, and paying
				assistants. If the person or persons for whom the services are performed hire,
				supervise, and pay assistants, that factor generally shows control over the
				persons on the job. However, if one person hires, supervises, and pays the
				other assistants pursuant to a contract under which the person agrees to
				provide materials and labor and under which the person is responsible only for
				the attainment of a result, this factor indicates an independent contractor
				status.
(6) Continuing
				relationship. A continuing relationship between the person and the person or
				persons for whom the services are performed indicates that an employer-employee
				relationship exists. A continuing relationship may exist when work is performed
				at frequently recurring although irregular intervals.
(7) Set hours of work. The establishment of
				set hours of work by the person or persons for whom the services are performed
				is a factor indicating control.
(8) Full time required. If the person must
				devote substantially full time to the business of the person or persons for
				whom the services are performed, such person or persons have control over the
				amount of time the person is able to do other gainful work. An independent
				contractor, on the other hand, is free to work when and for whom the person
				chooses.
(9) Doing work on the
				premises of the person or persons for whom the services are performed. If the
				work is performed on the premises of the person or persons for whom the
				services are performed, that factor suggests control over the person,
				especially if the work could be done elsewhere. Work done off the premises of
				the person or persons receiving the services, such as at the office of the
				worker, indicates some freedom from control. This fact by itself does not mean
				that the person is not an employee. The importance of this factor depends on
				the nature of the service involved and the extent to which an employer
				generally would require that employees perform such service on the employer's
				premises. Control over the place of work is indicated when the person or
				persons for whom the services are performed have the right to compel the worker
				to travel a designated route, to canvass a territory within a certain time, or
				to work at specific places as required.
(10) Order or sequence set. If a person must
				perform services in the order or sequence set by the person or persons for whom
				the services are performed, that factor shows that the person is not free to
				follow the person's own pattern of work but must follow the established
				routines and schedules of the person or persons for whom the services are
				performed. Often, because of the nature of an occupation, the person or persons
				for whom the services are performed do not set the order of the services or set
				the order infrequently. It is sufficient to show control, however, if such
				person or persons retain the right to do so.
(11) Oral or written reports. A requirement
				that the person submit regular or written reports to the person or persons for
				whom the services are performed indicates control. By contract, however,
				parties can agree that services are to be performed by certain dates and the
				persons performing those services can be required to report as to the status of
				the services being performed so that the person for whom the services are being
				performed can coordinate other contracts that person may have which are
				required in the successful total completion of a particular project.
(12) Payment by hour, week, month. Payment by
				the hour, week, or month indicates an employer-employee relationship, provided
				that this method of payment is not just a convenient way of paying a lump sum
				agreed upon as the cost of a job. Payment made by the job or on a straight
				commission generally indicates that the worker is an independent contractor.
(13) Payment of business or
				traveling expenses, or both. If the person or persons for whom the services are
				performed ordinarily pay the person's business or traveling expenses, or both,
				the person is an employee. An employer, to be able to control expenses,
				generally retains the right to regulate and direct the person's business
				activities.
(14) Furnishing of
				tools and materials. If the person or persons for whom the services are
				performed furnished significant tools, materials, and other equipment, it is an
				indication an employer-employee relationship exists.
(15) Significant investment. If the person
				invests in facilities that are used by the person in performing services and
				are not typically maintained by employees (such as the maintenance of an office
				rented at fair value from an unrelated party), or if the person invests in
				other business expenses (such as equipment and supplies, vehicles, liability
				insurance, advertising, or other promotion of services), that factor tends to
				indicate that the person is an independent contractor. Lack of investment in
				expenses relative to the performance of services indicates dependence on the
				person or persons for whom the services are performed for such facilities and
				indicates the existence of an employer-employee relationship.
(16) Realization of profit or loss. A person
				who may realize a profit or suffer a loss as a result of the person's services
				(in addition to the profit or loss ordinarily realized by employees) is
				generally an independent contractor, but the person who cannot is an employee.
				If the person is subject to a risk of economic loss due to significant
				investment or a bona fide liability for expenses, that indicates that the
				person is an independent contractor. The risk that a person will not receive
				payment for services, however, is common to both independent contractors and
				employees and thus does not constitute a sufficient economic risk to support a
				finding of an independent contractor.
(17) Working for more than one firm at a
				time. If a person performs services under multiple contracts for unrelated
				persons or firms at the same time, that generally indicates that the person is
				an independent contractor. A person who performs services for more than one
				person may be an employee for each of the persons, especially when such persons
				are part of the same service arrangement.
(18) Making service available to general
				public. If a person makes the person's services available to the general public
				on a regular and consistent basis that indicates an independent contractor
				relationship.
(19) Right to
				dismissal. The right to dismiss a person indicates that the person is an
				employee and the person possessing the right is an employer. An employer
				exercises control through the right of dismissal, which causes the person to
				obey the employer's instruction. An independent contractor, on the other hand,
				cannot be fired without liability for breach of contract so long as the
				independent contractor produces a result that meets the contract
				specifications.
(20) Right to
				terminate. If either person has the right to end the relationship with the
				person for whom the services are performed at any time the person wishes
				without incurring liability, that indicates an employer-employee relationship.
				If a contract can be terminated by the mutual agreement of the parties before
				its completion or by one of the parties to the contract before its completion
				to prevent a further breach of contract or to minimize damages, that indicates
				an independent contractor relationship.