What is an employee?

The relationship between an employee and an employer is a central relationship in most people's lives. But what is an employee? As it turns out, whether or not someone is an employee depends on a number of factors. These include the agreement between the employee and the employer, the facts surrounding the particular job, and what law is at issue.

The question of what is an employee is an important one. Most employment laws only apply to those workers who can be classified as employees. So, if a defendant is able to argue that a worker is not an employee, then the employee will not be protected by the particular law, be it an anti-discrimination law or a minimum wage law.

A typical definition of employee that you might see in a dictionary is a person who works for another person or for a company for wages or a salary. Under the law, the definition of who is an employee may be more complicated.

Under the traditional common law, a worker is an employee if the employer has the right to control the progress, details and methods of the employee’s work. If the employer exercises day to day control over the details of the work, the worker is an employee. Take, for example (drawing from the common law’s origins in old England), the royal blacksmith. The King tells him when to report to the forges and directs him as to the exact specifications of the armor and swords he should make and how he should make them. In the scenario, the blacksmith is an employee.

However, no one factor determines what an employee is, including the labels used by the parties. Even if an employment contract says that a worker is an independent contractor, the worker can still be classified as an employee based on an analysis of the overall job duties and the relationship between the parties. In other words, what the parties label the relationship is only one factor to consider. So, for example, even if a worker signs an agreement titled “Independent Contractor Agreement,” whether or not he is an independent contractor still depends on whether he can exercise control over how he does his job.

Federal statutes themselves may define what an employee is. Under the Fair Labor Standards Act, which created the national minimum wage, overtime, and banned child labor, an “employee” is one who is suffered or permitted to work. Under Title VII of the Civil Rights Act of 1964, which prohibits discrimination against individuals because of race, gender, religion or national origin, an “employee” is an individual who is employed by an employer.

However, because these definitions are somewhat vague, courts have come up with various factors to determine whether a worker is an employee. These include the degree of control exercised by the employer, the investment of the worker in the business, the opportunities the worker has for profit and loss, the skill and initiative required, and the permanency of the relationship.

The factor that is consistently the most important is control. If an employer has the right to control the details of how the worker performs his job, that worker is an employee. Example of control include who controls when and where to begin and stop work, the regularity of hours, the amount of time spent on particular aspects of the work, and tools and appliances used to perform the work. So, for example, a worker who uses an employer’s facilities and tools and is told what to do and when to do it by the employer is an employee. On the other hand, a worker who provides his own tools, sets his own hours, finds his own customers and is allowed to work for other employers is not an employee.