Control and the right of control is the overriding and deciding factor when testing and analyzing the "borrowed servant doctrine." Does the "special employer" have the absolute right to control the actions of the worker? As stated in the prior commentary, control only over the work being done is not sufficient; before status as a special employer can be assigned, the right of control must also encompasses the manner in which the work is performed.

Classification as a "special employer" is the third means by which an employer-employee relationship can be created. Of the three, this is the most unique as it is not created by a direct contract of hire or even by a statutory requirement; this relationship and the responsibilities that accompany it are born almost solely out of the right of control.

Defining "Control"

Employer-employee relationships impose specific duties and responsibilities upon each party. Employers are charged with many duties, among these are providing a safe and healthy work environment, making sure the correct tools are available to complete the assigned tasks, confirming that employees are properly trained and assuring that funds are available to cover the medical costs and/or lost wages should an injury occur (as per relevant statute). Employees, likewise, owe specific responsibilities to their employer; these include the duty to do the job that is assigned to them and to do it to the best of their ability and with the best interest of their employer in mind.

Special employer situations under the "borrowed servant doctrine" are no different. Employer duty and employee responsibility are present, but such duties and responsibilities arise strictly from the right of control as has been repeatedly pointed out in the opening paragraphs.

Each governmental body with an interest in this relationship and the insurance industry for its own purposes apply specific tests when trying to establish whether a particular worker is protected under the "borrowed servant doctrine." All of these interested parties list the "right of control" as one factor in the list of tests to be applied; but "control" itself is not defined by the individual tests, its definition is drawn and applied from other sources. Following are the markers that evidence "control:"
• The entity or person controls the manner in which the work is performed. Controlled workers are taken step-by-step through the process with the person in control confirming or providing the necessary training to complete each step leading to the desired outcome;
• The place of performance is delineated by the entity or person with control;
• Time of performance is mandated. The worker is expected to show up at specified times and work a set number of hours (with breaks for rest and lunch). When such specific period is over, the worker is free to leave;
• Details of the performance are mandated by the entity in control. The necessary tools, supplies and work areas are provided by the person or entity in control. The finished product must meet the controlling entity's standards;
• The person supervising the worker is a direct employee of the entity or person that hired the worker; and
• The work is being done exclusively for the entity that hired the worker (although the employer may turn over the finished product to another person or entity). Essentially, the worker is benefiting only the employer's business operation.

Absent sufficient evidence to the contrary, the original (direct) employer is presumed to retain control. But once the weight of the evidence based on the markers above conclusively shifts control to the "special employer," then the remaining "borrowed servant doctrine" tests can be scrutinized to determine if a "doctrinal" employer-employee relationship exists.

Other Borrowed Servant Tests

States and the Federal government apply specific tests to determine if a particular worker qualifies as a "borrowed servant" and the employer as a "special employer." The majority of these tests revolve around the question of control. The insurance industry thanks to Lex Larson and his "Larson's Workers' Compensation," marry the right of control detailed above with the various other tests to conceive and produce a three-part test to determine a worker's status as a borrowed servant and the employer's status as that of a special employer. These tests are:
1. Has the employee made a contract of hire, express or implied, with the special employer? In essence, has the direct employer volunteered or directed the employee to work for the special employer and has the employee agreed to such assignment;
2. Is the work being done essentially that of the special employer (as discussed under the right of control); and
3. Does the special employer have the right to control the details of the work?

If all of three questions are answered in the affirmative, then the employer is almost certainly a special employer and the employee a borrowed servant. There are other tests not contemplated by Larson that may need to be or will be considered by the court to absolutely prove special employer and borrowed servant status; these include:
• Does the presumed special employer have the right to discharge the worker? If the borrowing employer - then that evidences a borrowed servant;
• Who has the obligation to pay the employee? If the employee is paid by the borrowing employer, more proof of "special employer" status;
• Did the direct employer terminate the relationship with the employee? If so, the new employer is the "employer of record" as there is no longer another employer in the picture;
• What is the course of dealings between the direct employer and the presumed special employer? Is there a contractual relationship or requirement? Employer-employee status can be created (potentially) by contract; and
• Is the lent employee a specialist? And does the presumed special employer have the skill or knowledge to supervise the manner in which the work is being performed? This is a "negative test;" if the borrowing employer does not have the ability or skill necessary, the lent worker will likely not be considered a borrowed servant since one cannot control what it does not understand and cannot do; thus the individual is not a putative employee but a specialist.

Combining and analyzing the right of control, Larson's three-prong test and the five other distinguishing test factors will produce as nearly as possible a definitive answer to the question of "special employer" and a resulting "borrowed servant." Special employers owe the same duties to their borrowed servants as they do to any direct employee. An employer-employee relationship is created that must be managed both from a human resources and a risk management angle.

Following

All three employer classifications have been defined as have the tests necessary to determine if an employer is a special employer with borrowed servants. The next article will delineate the most common employment circumstances that result in the presence or creation of a borrowed servant; how such exposures can be handled by the workers' compensation policy; and a word about legal protections that can be extended to borrowed employees and their direct employers.