Title 9, Subtitle 2 of the Labor & Employment Article of the Maryland Annotated Code governs “Covered Employees and Employers” and defines an employer as any “person . . . governmental unit or quasi-public corporation that has at least 1 covered employee.” LE § 9-201 (emphasis added). Accordingly, “in a workers’ compensation case, the first question to be resolved is whether the Claimant is a ‘covered employee’” Elms v. Renewal by Andersen, 439 Md. 381, 392 (2014) (quoting W.M. Schlosser Co. v. Uninsured Employers’ Fund, 414 Md. 195, 206 (2010)); see also Pro-Football, Inc. v. McCants, 428 Md. 270, 280 (2012) (“Whether an individual is a covered employee depends on whether the individual is an employee of the employer, § 9-202(a); and on the site of employment, see § 9-203.”). In the absence of factual dispute, whether an injured worker qualifies as a “covered employee” is a question of law for the court. Elms, 439 Md. at 394-95.
Under the Maryland Workers’ Compensation Act (“the Act”), there is a presumption that an injured worker qualifies as a covered employee and the burden is on the employer to disprove the existence of the employment relationship. LE § 9-202. The presumption can be defeated, for example, by demonstrating that the alleged employee constitutes an “independent contractor” or “casual employee” within the meaning of the Act. LE § 9-202(c) (“To overcome the presumption of covered employment, an employer shall establish that the individual performing services is an independent contractor in accordance with the common law or is specifically exempted from covered employment under this subtitle.”); LE § 9-205 (“A casual employee is not a covered employee.”).
In July 2014, the Court of Appeals of Maryland reiterated the proper analysis for determining whether an injured worker qualifies as a “covered employee.” In Elms v. Renewal by Anderson, supra, the Court described the inquiry for discerning the existence of an employer/employee relationship under the Act as the same as determining the existence of a master/servant relationship under the common law. More simply put, where there exists a common law employment relationship, there necessarily also exists an employee/employer relationship within the meaning of the Maryland Workers’ Compensation Act.
Traditional common law analysis focuses primarily on the concept of power and control. According to the Court of Appeals in Elms,
[W]e look to the common law “master” and “servant” relationship to determine whether an individual is a “covered employee.” See Sun Cab Co. v. Powell, 196 Md. 572, 577, 77 A.2d 783, 785 (1951) (“[T]he words ‘employer’ and ‘employee’ in the Workmen’s Compensation Act are synonymous with the words ‘master’ and ‘servant,’ and the rules for determining the existence of the relation of employer and employee under the Act are the same as the rules at common law for determining the relation of master and servant.”). In undertaking this analysis, we typically consider five factors: “(1) the power to select and hire the employee, (2) the payment of wages, (3) the power to discharge, (4) the power to control the employee’s conduct, and (5) whether the work is part of the regular business of the employer.” Whitehead v. Safway Steel Products, Inc., 304 Md. 67, 77–78, 497 A.2d 803, 808–09 (1985). Although all five factors are relevant in determining whether there is an employer/employee relationship, we held in Whitehead that the power to control the employee’s conduct is the most important factor. 304 Md. at 78, 497 A.2d at 809 (stating that the employer’s “‘right to control and direct the employee in the performance of the work and in the manner in which the work is to be done’ is the ‘decisive’ or ‘controlling’ test”). In other words, the one exercising control is the employer.
439 Md. at 393 (emphasis added).
The Claimant in Elms qualified as the covered employee of a principal contractor due to the obvious control the principal contractor maintained over the employee, a subcontractor. The Court acknowledged that the case presented a somewhat unusual outcome because, in the principal contractor/subcontractor context, there is oftentimes indirect and/or insufficient interaction between a principal and an employee to establish a common law employment relationship. However, the Court was persuaded by a number of factors that, in sum, reflected that “the performance of the work and . . . the manner in which the work was to be done,” was controlled entirely by the principal contractor. Id. at 395 (internal citation omitted). For example, the principal contractor required employees to abide by detailed “policies and instructions contained in an ‘Installation Job Expectations’ manual.” Additionally, the principal contractor “spot-checked” and reviewed the subcontractor’s work, and also required employees to place signs at job sites and wear clothing bearing the principal’s logo. Id.
The Court was influenced by the earlier decisions in Whitehead v. Safway Steel Products, Inc. and Mackall v. Zayre Corp. (infra). In Whitehead, an injured worker retained by a temp agency was deemed to be a covered employee of the alleged employer “as a result of the level of control over [the temporary employee’s] actions.” Relatedly, in Mackall, a worker qualified as a covered employee after being subjected “to all the same rules and regulations that were applicable to a regular employee of the company, including the requirement to wear a ‘Zayre’ logo smock.” The Elms Court found both cases to be factually in-line with the case at bar and thus ruled accordingly. Elms, 439 Md. at 391-96 (discussing Whitehead v. Safway Steel Products, Inc., 304 Md. 67, 79 (1985); Mackall v. Zayre Corp., 293 Md. 221, 225–26 (1982).
In sum, a covered employee within the meaning of the Maryland Workers’ Compensation Act exists where there is a common law master/servant relationship. Of course, the analysis is driven by the facts of an individual case, as there are a number of factors that could possibly impact its outcome. The primary factor, however, focuses on the concept of power and control. Regardless, where it is determined that a common law employment relationship exists, an injured worker is most likely entitled to workers’ compensation benefits.
