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Potter v. Hawaii Newspaper Agency2/19/1999
the parties have `agreed' not to label themselves as employer and employee." Id. "Based upon the applicable caselaw , the definitions of employee and employment in HRS § 386-1, and the facts before us, we conclude that the work arrangement between Claimant and HNA wherein Claimant agreed to purchase newspapers at wholesale price, sell them to customers at retail, with Claimant pocketing the difference as his "profit", and deliver them on an assigned route at a time and in the manner specified by Toyozaki or HNA, meets the necessary requirements of a contract of hire. "B. Legality of Contract of Hire ". . . . "Unless Claimant was hired to work in an illegal or criminal enterprise or occupation, his status as an employee does not cease even though the employment may have been unlawful. 1 Modern Workers' Compensation, § 106:3 (Canavan ed. 1993)[.] Consequently, an employee is still an employee even though "he or she is paid less than the minimum wage and therefore is illegally employed, or works in violation of any law regulating wages and hours, or works in violation of Sunday laws, or works without a required license, permit, or certificate, or works for a public employers in violation of civil service or other hiring law or regulation." Id. "In this case, Claimant was hired to sell and deliver newspapers. Claimant does not allege and there is no evidence that the sale and delivery of newspapers is an illegal activity or occupation. Accordingly, we conclude that Claimant's contract of hire with HNA is not void or voidable. "C. Control vs. Consent "Claimant contends that in a situation where the injured person had entered into an independent contractor agreement and disavowed any rights he or she may have had under Chapter 386, consent to employment, and not control, should be the test to determine whether there was an employment relationship. And since Claimant did not consent to an employment relationship in this case, Claimant concludes that there was no employment relationship. In support, Claimant cites to Kepa v. Hawaii Welding Co., Ltd., 56 Haw. 544, 551 (1976). "In Locations, supra, the Hawaii Supreme Court explicitly stated that the test for determining the existence of an employment relationship for purposes of workers' compensation is the degree of control exercised by the person in whose behalf the work is done. Since the Court made no exceptions, we conclude that the control test must be applied in all cases whether the injured worker seeks workers' compensation coverage or not. "As for Kepa, we do not consider it persuasive authority. In Kepa, the Hawaii Supreme Court, quoting from 1A Larson, Workmen's Compensation Law, § 48.10 (1973), stated that an employment relationship "must be entered into in a deliberate manner with the informed consent of both parties." The issue in Kepa was whether a lending employer had transferred control over the lent employee to a borrowing employer so that the lending employer is relieved of its workers' compensation liability. Likewise, § 48.10 to Larson's Workmen's Compensation Law, refers to a lent employee or dual employment situation. It was Professor Larson's opinion that consent was a factor in determining whether an employee, who was loaned out by the lending employer, had entered into a separate contract of hire with the borrowing or "special" employer. "We find Kepa and § 48.10 inapposite since the quoted statement was made in the context of a lent employee or a dual employment situation. "We, therefore, conclude that the control test must be applied in this case to determine whether an employment relationship existed between HNA and Claimant. In this case, HNA, through Toyozaki, assigned a route to Claimant and dictated the time, method, and manner in which the newspapers are
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