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The Halachic Considerations of Hiring: Liability in the Workplace
By Dayan Yehoshua Wolfe
Upon embarking on any business venture, it is beneficial to anticipate that things might not go as planned, and staffing a job is no exception. When it comes to a worker’s liability for damages, employers might not be as safe as they think. For example, consider the process of building a house. If, during construction, a builder damages some of the accomplished work, Halacha will certainly exempt him from paying the full value of the damage. Thus, the prospect of serious losses to the employer undeniably exists. This article will discuss various liability concerns as they pertain to independent contractors, employees and employers.
There are three important categories that we will discuss in this article: a) Nezikin (tort/damages), b) Loss/Theft, c) Liability of a business for damage caused by its employees.
Nezikin (Tort)
There is a difference between an employee and an independent contractor in Halacha, with regards to damages. As we mentioned in our previous articles, the general status of an employee (as opposed to an independent contractor) in Halacha is similar to that of an Eved Ivri – a servant. Therefore, many of the Halachot pertaining an employee are derived from the laws of Avadim. However, with respect to the issue of liability for damages, the distinction between employee and independent contractor is based on economic reality. The essence of an employee is that he is compensated for labor, whereas, a contractor is paid for production.
A damages claim is limited to damages inflicted to the accuser’s property. In contrast, if damage occurs to the Mazik’s (damager) own property, he technically cannot be held liable, even if the accuser’s interests are affected. As Maran states “one who damages another party’s property is obligated to pay for the damage”. Thus, the issue of a craftsman’s liability on his work is dependent on the following matter: to whom does the product of a worker belong; is it the property of the employer, or the worker?
Let us say, for example, that a tailor is hired to make a suit from fabric furnished by the employer. The value of the fabric is 300 dollars and the completed net result is 1,000 dollars. Approaching the end of the tailor’s work, he damages the suit. The question arises whether the tailor is responsible for the damage. In view of the abovementioned principle, that a Mazik is only liable for damage to the complainant’s property, it would depend on to whom the suit-in-progress belongs. If it is property of the tailor, the tailor is exempt from liability. If however it becomes property of the customer, he will be held accountable for the damage.
The source of this discussion is from the Talmud in Bava Kama and Bava Metzia. As a matter of Halacha, the Shach contends that it remains unresolved, and that the claim of Mazik cannot be invoked to require recompense from the worker.
According to the Aruch HaShulhan, this Halacha only applies to independent contractors, but employees (“day laborers”) are held liable for their damage. The Ketzot HaHoshen, on the other hand, holds that this exemption includes employees as well.
Loss or Theft
Another aspect of worker liability is loss/theft, or any other damage to the employer’s property. This issue also depends on whether the worker is an independent contractor or an employee. The Mishna states: “All craftsmen are Shomre Sachar (paid custodians)”. A Shomer Sachar assumes responsibility for anything that happens to the depositor’s property, which is possible for him to prevent. Granted that in the Shach’s opinion, unless the work is performed in the employer’s premises, this Halacha also applies to independent contractors; the S’ma nonetheless maintains that only employees accept this responsibility.
Liability of a Business for Damage Caused by its Employees
When it comes to an employer’s liability on damages caused by his workers, the Halacha is largely unclear. For instance, if a business hires a truck-driver to deliver goods to its customers, and the driver gets into an accident and damages someone else’s property, is the business held accountable?
This question is based on a Mishna in Bava Kama. The Mishna says, that a builder who is hired to knock down a wall, and directly damages either the wall itself or something else, is obligated to pay for the damage. The Shita Mekubetzet cites various Rishonim who maintain that this rule that the worker, and not the employer, is responsible, only applies when hiring independent contractors. If, however, the worker is an employee, according to some opinions, the employer must pay an equal portion of the damage. Other opinions contend that the employer is exclusively accountable.
Thus, a business that hires an independent trucker (that has an independent contractor status) will never be held liable for damages caused by the driver, but if the driver is hired as an employee, the business may be accountable. That being said, the Halacha in this case is not clear, because the employer is not present at the time of the damage.
Though this article addresses many key Halachic distinctions between employees and independent contractors, there are many more differences between them. Therefore, it is always advisable to seek Halachic guidance on how to best structure human resources.