Employee vs Independent Contractor

Although Employment Law as a subject in itself isn't tested on the UBE, the distinction between an employee and an independent contractor may show up in the subject of Agency, which is tested with some frequency on the essays, and in Torts on both the MBE and on the essays. The distinction plays on liability. An employer is more likely to be liable for the acts of his/her employee than for the acts of an independent contractor. An initial consideration is to determine employee status. Then, scope of employment must be analyzed since an employer is liable only for acts of an employee that occur within the scope of employment. 

The general test of whether a person is an employee is whether the person's conduct in performance of a service is subject to the employer's control or right to control. A number of factors are relevant to this "control" inquiry, including the following:

~Where, when, and how the work is performed. If the person, for example, has set hours and the employer is providing all the tools necessary to do the job, that lends itself to employee status.

~Is the work temporary or ongoing. Temporary work is more likely to be done by an independent contractor, but if there is no specific endpoint, employee status is more likely.

~Does the person have complete autonomy do to the work in the manner he/she sees fit? If instead, the employer directs such things, the person is more likely an employee.

~Is the person free to accept work from other businesses? If so, probably an independent contractor, if not, probably an employee. 

~Is the employer deducting taxes from payments? Employers do so for employees, but rarely for independent contractors. 

There's also some circumstantial evidence that can help guide this decision. Employees generally have company email addresses, attend staff meetings/parties, etc. In other words, if someone is treated as if the person is an employee, it may be because the person is considered an employee by the employer. 

Determining that someone is an employee rather than an independent contractor doesn't end the inquiry for employer liability, however. An employer is liable only for the acts of employees that occur within the scope of the employee's employment. Thus, scope of employment is the next element. 

Whether an employee is acting within the scope of employment depends on whether the employee's act is of a kind that the employee was hired to perform. Also important is to analyze whether the act occurs substantially within the authorized time and space limits provided by the employer, and whether the act is motivated, at least in part, to serve the interests of the employer. 

A final note worth remembering is that the fact that the act may not have been explicitly authorized by the employer is not determinative. An unauthorized act that fits the formulation above may still be deemed an act within the scope of the employee's employment.