Walrond v. County of Somerset

In New Jersey, however, N.J.S.A. 34:15–36, defines “employee” as “synonymous with servant, and includes all natural persons, including officers of corporations, who perform service for an employer for financial consideration [.]” FN5 (emphasis added). Service performed in exchange “ ‘for financial consideration’ is a cardinal legal requirement in [workers’] compensation for the creation of the status of employer and employee.” Goff v. County of Union, 26 N.J. Misc. 135, 138, 57 A.2d 480 (Dept. Labor 1948). That services be rendered for “financial consideration” has been recognized as “the primary governing standard defining an *239 employee[.]” Kraivanger v. Radburn Assoc., 335 N.J.Super. 169, 172, 762 A.2d 222 (App.Div.2000); Gross v. Pellicane, 65 N.J.Super. 386, 395, 167 A.2d 838 (Cty.Ct.1961) (“a prerequisite to the existence of an employment status is that there be a financial consideration flowing between the employer and the employee.”).

FN5. Excluded from this definition are only “employees eligible under the federal ‘Longshore and Harbor Workers’ Compensation Act,’ ” and “casual employments.” [9] Financial consideration, under the statute, need not be in the traditional form of a wage. Johnson v. The United States Life Ins. Co., 74 N.J.Super. 343, 349–50, 181 A.2d 380 (App.Div.1962). For instance, free board and lodging or a rent-free apartment have been held to constitute consideration given in return for services rendered. See Britten v. Berger, 18 N.J. Misc. 215, 12 A.2d 875 (Dept. Labor 1940); Simpson v. Vertty, 3 N.J. Misc. 9 (Dept. Labor 1925). In addition, benefits such as vocational instruction, training, and incidental equipment have also been deemed compensation. Heget v. Christ Hosp., 26 N.J. Misc. 189, 192, 58 A.2d 615 (Cty.Ct.1948) (finding that student nurse was employee of hospital even though she did not receive wages for her work). [10][11] Reimbursement or payment of expenses “could also be seen as a form of compensation when others who might be classified as ‘true volunteers’ were not so compensated.” Kraivanger, supra, 335 N.J.Super. at 172, 762 A.2d 222.

In addition, “even where no specific salary or manner of payment is fixed, the law in a proper case may spell out an agreement implied in fact to pay for the reasonable value of the services rendered.” Johnson, supra, 74 N.J.Super. at 350, 181 A.2d 380. Notably, “employee status for workers’ compensation purposes exists if any financial consideration at all passes.” Kraivanger, supra, 335 N.J.Super. at 172, 762 A.2d 222. In short, “financial consideration” includes anything of value to be received by the individual in return for his services, but not the hope of future favors. Hawksford v. Steinbacher Packing Co., 73 N.J.Super. 175, 180, 179 A.2d 181 (Cty.Ct.1962), aff’d, 80 N.J.Super. 129, 193 A.2d 163 (App.Div.), certif. denied, 41 N.J. 195, 195 A.2d 466 (1963). *240 [12] It is not necessary, to be considered an employee, to receive “financial consideration” directly from an employer. Rather, indirect compensation for services is sufficient to establish the employment relationship. Pickett v. Tryon Trucking Co., 214 N.J.Super. 76, 81, 518 A.2d 500 (App.Div.1986), certif. denied, **499107 N.J. 149, 526 A.2d 210 (1987). In Pickett, for example, consideration passed from Tryon Trucking to a third-party who, in turn, paid petitioner for his services rendered to Tryon, and therefore, Pickett was found to be an employee of Tryon. Ibid. [13][14] In contrast, however, volunteers who act out of civic or charitable motives with no expectation of payment are not employees. Cerniglia v. City of Passaic, 50 N.J.Super. 201, 208, 141 A.2d 558 (App.Div.1958). “It is clear that one who volunteers his [or her] services and neither receives nor expects to receive payment is not an employee for workers’ compensation purposes.” Veit v. Courier Post Newspaper, 154 N.J.Super. 572, 574, 382 A.2d 62 (App.Div.1977) (citing Cerniglia, supra, 50 N.J.Super. 201, 141 A.2d 558; Armitage v. Trs. of Mt. Fern M.E. Church, 33 N.J.Super. 367, 110 A.2d 154 (Cty.Ct.1954); 1A Larson, Workmen’s Compensation Law, § 47.41 (1973)). The Cerniglia court noted that “[t]he [workers’] compensation decisions uniformly exclude from the definition of ‘employee’ those who neither receive nor expect to receive any kind of pay for their services.” Cerniglia, supra, 50 N.J.Super. at 208, 141 A.2d 558 (citing 1A Larson, supra, § 47.41 at 696).

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