Persons who are paid as employees (the employer pays federal or state
withholding tax, Federal Insurance Contributors Act [FICA], insurance, and so
on) will generally be considered employees for determining vicarious liability. If
the worker is a volunteer who receives no pay but does a defined job that is
usually done by paid employees, the volunteer is also treated as an employee.
If FICA should be paid but is not because the employee and the employer are
trying to evade their tax liabilities, the court can still find the putative
employer vicariously liable for the person’s actions. In addition, the employer
may have liability for tax evasion. The Internal Revenue Service has become
intolerant of paying an individual as a contract worker to avoid employment
taxes and FICA. If the worker is truly a contract worker, is a volunteer who is
not displacing a paid worker, or is paid by someone else, then vicarious liability
is determined by the extent to which the individuals control their own work.