Business Law question

[chefross]

What happens a when customer decides they are going to start making and pouring coffee, clearing and resetting tables, and general staff side work, to the extent that even the owner expects this person to do this regularly?
What is the liability if this person gets injured?
Does an oral agreement exist between the customer and owner?

 

[chefwriter]

As far as I know, depending on the state of course, oral agreements aren't worth spit. On the other hand, the customer is there voluntarily. You clearly aren't forcing them to do the work.
The voluntary part probably eliminates liability but I only know that from cutting my hand badly while working on my sisters' house. I had to pay the bill. I wouldn't assume the same with a business though.
A call to the Dept. of Labor would probably clear that up but you might find the applicable law on line now. Most governments post all that stuff

 

[brianshaw]

I’m not too sure I really understand the scenario, but a business should know their liability for both employees and patrons... and if applicable... volunteers.

Ask a lawyer... who will probably say there is no valid “oral agreement” in this scenario, oral agreements are not even worth spit despite being legally possible, and a business is potentially liable for anything that happens whether that involves an employee or patron. Gross negligence on one part or the other could make a difference in liability assignment but that would be for a court to decide.

What does the business ‘s insurance have to say... that matters more than trying to decipher labor/liability/contract law, etc.

No matter... this sounds like a bad idea from any perspective. What’s the worst that can happen... someone gets injured, insurance denies the claim, and the business gets sued and loses. Unfortunately the worst case is probably exactly what would happen the first and every time something goes wrong in an informal situation like this.

If nothing ever goes wrong... it’s free labor. But is it worth the risk?

 

[cheflayne]

implied consent

 

[Seoul Food]

Are you saying that this is a volunteer or just a regular customer who is doing this acts on their own? If it is a volunteer there is paperwork for it (at least here in NY) but they are still basically considered your employee and you are responsible for them. We are even responsible for workers like contractors that are on the premises. If they are just a customer who is doing things like clean up duty and such I would tell them to stop and mind their own business unless they would like to fill out a job application because I see nothing good coming from this arrangement. The minute they get hurt or do something to a customer the owner is going to be on the hook.

 

[sgsvirgil]

What happens a when customer decides they are going to start making and pouring coffee, clearing and resetting tables, and general staff side work, to the extent that even the owner expects this person to do this regularly?
What is the liability if this person gets injured?
Does an oral agreement exist between the customer and owner?

What are the details? What state? How long has this been going on?

The intent of every state's worker's compensation law is to favor the injured worker, which typically includes a very broad and liberal definition of what constitutes an "employer/employee" relationship.

Based on what you've described, if the person is injured while performing these activities, I think they would be considered for the purposes of Workers' Comp an employee. Generally speaking, most states define an employer/employee relationship as a) the right to hire and fire - can the owner stop the person at any time? Did they choose not to stop them? They let the activity continue; b) Method and manner of payment - did the owner decide what, if anything, the person would receive in exchange for their services.....free meals, discounted pricing etc. OR c) Direction and control - does the owner have the ability to tell the person what to do, how to do it, when to do it and so on?

Generally speaking, if any one of these elements exists, then, for the purposes of workers' comp, an employer/employee relationship may exist. Again, it depends on the state.

On the other side of the coin, if the person is injured while performing these activities, AND it is determined that an employer/employee relationship does not exist, then, generally speaking, the person could conceivably sue the owner for his/her injuries. There are limitations and thresholds that would otherwise have to be met depending on the state where this happens. Nevertheless, this situation does create at least some measurable risk for the owner.

Not for nuthin, but, why doesn't the owner simply hire the person? That would eliminate a metric sh*t ton of potential issues.

 

[chefross]

Thanks for your replies. I do not know any of the details other than what I perceived while at this place as a customer.
I too agree that nothing good is going to come from this and I'm aghast that the owner is even allowing this to happen.
No idea how long it's been going on, but heard from people that eat there often, this guy's a retired cop with a bed ridden wife and comes to this place to hang out.

 

[brianshaw]

Ahhhh, the “regulars” that hang out... the sign of a dead or dying establishment. TheY forget that the restaurant is a business and treat it like their own kitchen... never really paying their way. All the while the proprietor is going broke. Its not just an accident liability concern most of the time... this is as much a business question as a legal question!

 

[meezenplaz]

Ive seen customers do this but never to that extent.
In my opinion, theyre an unpaid volunteer employee, but an employee nonethe less, due to regularity and length of time--this is far from a one time thing.
So say on one of their regular "hang out days" theyre up at the coffee pot, (behind the counter) I dunno, wiping around it say, they acidently break the pot, get burned and cut. (doofus!) IMO, they could fully expext to be covered under workmans comp for the injury. In my experience, regular volunteers can be covered under the insurance, and thats what the business is paying for. It would be counter productive for an owner to be hard nosed, "I never told you to do any of this". Just bad relations all around.

I might also add that in most restaurants, theres a definite division between public and employee areas, and this is often enforced by the health department. If this customer is going back into the
kitchen say, with dirty dishes, not only is the owner violating relulations, but if they get hurt back THERE, I think the owner could be facing some real trouble.
Its quite common for regular "cafe groupies" to roll silverware, buss tables, pour coffee, reset tables etc. Gives em something to do besides sports page or crosswords. But they buss to the buss station just outside the kitchen door. And supplies from dry storage should be brought TO them by someone with a current check stub.
In the case of an "open cafe" type, you know, its harder to tell employee only areas from public. Prob harder for the health dept too.

Another interesting question comes to mind,...what if one of these volunteers is say, refilling coffe cups for Table 16, and accidently injures a CUSTOMER??

 

[sgsvirgil]

Ive seen customers do this but never to that extent.
In my opinion, theyre an unpaid volunteer employee, but an employee nonethe less, due to regularity and length of time--this is far from a one time thing.
So say on one of their regular "hang out days" theyre up at the coffee pot, (behind the counter) I dunno, wiping around it say, they acidently break the pot, get burned and cut. (doofus!) IMO, they could fully expext to be covered under workmans comp for the injury. In my experience, regular volunteers can be covered under the insurance, and thats what the business is paying for. It would be counter productive for an owner to be hard nosed, "I never told you to do any of this". Just bad relations all around.

I might also add that in most restaurants, theres a definite division between public and employee areas, and this is often enforced by the health department. If this customer is going back into the
kitchen say, with dirty dishes, not only is the owner violating relulations, but if they get hurt back THERE, I think the owner could be facing some real trouble.
Its quite common for regular "cafe groupies" to roll silverware, buss tables, pour coffee, reset tables etc. Gives em something to do besides sports page or crosswords. But they buss to the buss station just outside the kitchen door. And supplies from dry storage should be brought TO them by someone with a current check stub.
In the case of an "open cafe" type, you know, its harder to tell employee only areas from public. Prob harder for the health dept too.

Another interesting question comes to mind,...what if one of these volunteers is say, refilling coffe cups for Table 16, and accidently injures a CUSTOMER??

They would probably be covered under the business' Workers' Comp as a "casual employee." Essentially, a "casual employee" is a person who works for a business on an "as needed" basis without any guarantee of continued employment. Every state is different and has different definitions of what "casual employment" means.

In the scenario where the "volunteer" accidentally injures a customer while serving them, that would probably be no different that if a regular employee accidentally injured a customer. The injury would likely come under the business' liability policy.

 

[brianshaw]

You might want to look up the definition of “employee “... generally it includes “for wages or salary” and employer control of employee.

The scenario in the OP is likely neither casual nor regular employment... nor a consulting relationship.. nor a volunteer relationship.

 

[sgsvirgil]

What you have described is the dictionary's definition of "employee." For the purposes of workers' comp, that definition is generally much more broad. This is not something where a judge looks up the definition of "employee" and applies it to the facts of a case and decides "yes, you are an employee" or "no, you are not an employee."

Instead, in most states, there is a test that the Court utilizes when deciding the factual issue of whether or not an employer/employee relationship exists. In New York, for example, there are three components associated with an employer/employee relationship for the purposes of Workers' Comp. Those components are 1. right to hire and fire; 2. method and manner of payment; and 3. direction and control. Under New York Law, only one of those components must be present to establish that an employer/employee relationship exists. Most states follow a similar test.

Who has the right to terminate the relationship" If you do as the business owner, that's enough to establish an employment relationship exists.

Who determines how payment is made and in what form? As the business owner, do you get to decide if the person is paid by check, cash, direct deposit, how much and when? If so, then, an employer relationship exists.

Who has direction and control? As the business owner, do you decide what work gets done, how its done, when its done, where its done, whether its done properly or to standard? If so, an employer relationship exists.

Even volunteer work can be considered "employment" for the purposes of workers' comp. How can that be if no one is getting paid? it can be as simple as deciding who sets the schedule or what work gets done or how its done and so on.

Generally speaking, its also not necessary for the employer to exercise one or all three of these conditions. Again, generally speaking, the employer need only "retain" any one or all three of these conditions in order for an employer/employee relationship to exist for the purposes of Workers' Comp.

If you are an employer or your responsibilities include dealing with workers comp issue for your employer or business, it would be wise to become intimately familiar with how your state deals with this issue. It can save you a lot of headaches and frustration.

Cheers!

 

[brianshaw]

Well good luck with that!

What I described was from a summary of Federal employment law. Probably not a good recitation of that summary...

Yes, volunteers generally are covered by workers comp. but that is not this scenario. This was described as customers who started hanging out and helping themselves. Presumably without being asked. Quite clearly without being tasked or managed.

 

[sgsvirgil]

Well good luck with that!

What I described was from a summary of Federal employment law. Probably not a good recitation of that summary...

Yes, volunteers generally are covered by workers comp. but that is not this scenario. This was described as customers who started hanging out and helping themselves. Presumably without being asked. Quite clearly without being tasked or managed.

Indeed, I read the OP's scenario.

If the customers "help themselves" to some coffee, or occasionally pour a cup for another customer or perform similar "courtesies," then, I would think no, they would probably not be considered "employees". However, this scenario clearly distinguishes itself from what the OP has described.

The OP said that the customer routinely engages in"clearing and setting tables," and other "staff side work" to the point where the owner expects the customer to do these tasks. Even if there is no pay, that customer has crossed the boundary and has become an employee, especially since the owner has come to expect the customer to perform these tasks.

The OP asked if this sort of thing was good idea and the answer is no, it is not. Insurance companies tend to not like it when more people are working for a business than what has been reported or covered on the comp policy, especially off the books.

The only sensible solution here is for the owner to either put an end to the customer helping out or hire the person and put them on the books.

Cheers.