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!
