Section 383-6, Hawaii Revised Statutes (HRS), provides that services performed by an individual for wages or under any contract of hire shall be deemed to be employment subject to chapter 383, HRS, irrespective of whether the common law relationship of master and servant exists, unless it is shown to the department that each of the following criteria have been met (commonly known as the ABC Test):
- The individual has been and will continue to be free from control or direction over the performance of such service, both under the individual’s contract of hire and in fact; and
- The service is either outside the usual course of the business for which the service performed or that the service is performed outside all the places of business of the enterprise for which the service is performed; and
- The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the contract of service.
Hawaii Administrative Rules (HAR) section 12-5-2 defines terms used in the ABC test and includes the 20 factors intended to be used as a guide in determining whether an individual is an employee under common law rules. The rule clearly enunciates that the degree of importance of each factor varies depending on the occupation and the factual context in which the services are performed, without requiring a “preponderance” of factors.
The following are decisions rendered by ESARO on services performed for hire and whether such services were covered employment or independent contractor services.
Clinical Psychologist Services
Energy Drink Marketing Services
