HAR §12-5-2. Master and servant relationship

(a) Services are deemed to be in employment if sections 383-2 and 383-10, Hawaii Revised Statutes, are satisfied, unless and until it is shown to the satisfaction of the department that all of the three-fold conditions or AABC@ test under section 383-6, Hawaii Revised Statutes, are met. In applying section 383-6, Hawaii Revised Statutes, to an individual=s services, the following definitions shall apply: (1) "Contract of hire" is a written or oral, express or implied, agreement between two or more individuals which creates an obligation to do or not to do a particular thing and where such agreement demonstrates a promise of wages for services performed. (2) "Control or direction over the performance of such service" means general control and need not extend to all details of the performance of service. The employer need not actually exercise control; it is sufficient that there is a right to do so. (3) (A) "Outside the usual course of the business" refers to services that do not promote or advance the business of the employer, or services that are merely incidental to, and not an integral part of, that business. (B) "Outside of all the places of business of the enterprise" refers to places other than the business=s home office, headquarters or territory in which the business operates; (4) "The individual is customarily engaged in an independently established trade, occupation, profession, or business" refers to an individual who is performing services and is established in the business of performing these services independent of whatever connection the individual may have with an employer and that the individual must have a proprietary interest in such business, something in which the individual has a right of continuity, which the individual can sell or give away, and which is not subject to cancellation or destruction upon severance of the relationship with the employer. (b) As an aid to determining whether an individual is an employee under the common law rules, twenty factors or elements have been identified as indicating whether sufficient control is present to establish an employer-employee relationship. The twenty factors set forth 3 below are designed only as guides for determining whether an individual is an employee and the degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed. (1) The employer for whom services are being performed requires the individual to comply with instructions regarding when, where, and how services are performed; (2) The employer for whom services are being performed requires particular training for the individual performing services; (3) The services provided by the individual are part of the regular business of the employer for whom services are being performed; (4) The employer for whom services are being performed requires the services be performed by the individual; (5) The employer for whom services are being performed hires, supervises or pays the wages of the individual performing services; (6) The existence of a continuing relationship between the employer for whom services are being performed with the individual performing services which contemplates continuing or recurring work, even if not full-time; (7) The employer for whom services are being performed requires set hours during which services are to be performed; (8) The employer for whom services are being performed requires the individual to devote substantially full-time to its business; (9) The employer for whom services are being performed requires the individual to perform work on its premises; (10) The employer for whom services are being performed requires the individual to follow a set order or sequence of work; (11) The employer for whom services are being performed requires the individual to make oral or written progress reports; (12) The employer for whom services are being performed pays the individual on a regular basis such as hourly, weekly or monthly; (13) The employer for whom services are being performed pays expenses for the individual performing services; (14) The employer for whom services are being performed furnishes tools, materials, and other equipment for use by the individual; (15) There is a lack of investment in the facilities used to perform services by the individual; (16) There is a lack of profit or loss to the individual as a result of the performance of such services; (17) The individual is not performing services for a number of employers at the same time; (18) The individual does not make such services available to the general public; (19) The employer for whom services are being performed has a right to discharge the individual; (20) The individual has the right to end the relationship with the employer for whom services are being performed without incurring liability pursuant to an employment contract or agreement. [Eff. 11/6/06] (Auth: HRS §383-92) (Imp: HRS §§383-2, 383-6, 383- 11) 4