Introduction

Employers can and have been held liable for the actions of their employees. This includes lawsuits for negligence due to cell phone usage while driving. This white paper addresses why businesses should and must care. This paper:
Discusses various legal theories of employer liability, including respondeat superior, or vicarious responsibility, which says that an employer can be held legally responsible for negligent actions of their employees, as well as other ways employers can be found liable. This liability e ists even if the accident occurs in a !urisdiction that hasn"t yet specifically banned te ting while driving http://pricecaolawblog.com/?p=243

Employer liability for commuter accident in China

January 25, 2013 Posted by John F. Cao under English No Comments

This memorandum dis usses the !arious "otential em"loyer liabilities #or a idents that o ur $hile em"loyees are tra!eling to and #rom $or%. &n general, $here the em"loyer is not at #ault, China's $or%(related in)ury insuran e #und $ill o!er a "ortion o# the osts asso iated $ith an em"loyee ommuter a ident. &n a no #ault situation, the em"loyer $ill not be liable #or any additional in)ury(related osts. *o$e!er, i# the em"loyer is at #ault, the em"loyer may in ur negligen e related liabilities. Con lusion+ Pro!iding trans"ortation to and #rom $or% adds "otentially signi#i ant i!il liability #or the om"any as $ell as liabilities #or the dri!er. The best $ay to limit "otential liability #or the om"any and the dri!er is to limit the trans"ortation bene#it to reimbursements o# tra!el osts. *o$e!er, i# the om"any $ishes to "ro!ide em"loyees $ith ommuter trans"ortation, the ne,t best o"tion is to hire a ser!i e om"any that "ro!ides a dri!er and ar.

-tated belo$ are multi"le #a tual s enarios and the legal analysis that orres"onds to ea h ir umstan e. - enario 1+ Com"any Car . ident *y"otheti al Fa ts+ . om"any(em"loyed dri!er using a om"any o$ned ar dri!es an em"loyee to and #rom $or%. The em"loyee is in)ured in an a ident $hile being dri!en to $or%. /iability .nalysis+ .0 Co!erage by the insuran e #und 1nder the 2or%(3elated &n)ury &nsuran e 3egulations 4the 53egulations60, the in)ury su##ered by the em"loyee $ill be o!ered by the insuran e #und. The 3egulations a""ly to business enter"rises, "ubli institutions, so ial grou"s, non("ro#it organi7ations, #oundations, and #irms. The 3egulations o!er any in)ury that o urs during the em"loyee's )ourney to and #rom the $or%"la e. The 3egulations also o!er multi"le modes o# trans"ortation, in luding ars, trains, #erries, sub$ays, and bi%es. &# the in)ured em"loyee is #ound by the 8e"artment o# /abor -e urity to be at #ault, the bene#its "aid to the em"loyee $ill be redu ed. 3edu tions may also be made i# the em"loyee $as engaging in an illegal a ti!ity during the a ident. .ll om"anies and organi7ations o!ered by the 3egulations must "ay "remiums on behal# o# their em"loyees. &# an em"loyer #ails to "ay the re9uired "remium, the em"loyer $ill be liable to the em"loyee #or the #ull e9ui!alent ost that $ould be o!ered by the 3egulations. For re#eren e, in 2011 the a!erage lum" sum "ayment #or death bene#its $as 3:; 3<,000. &# the em"loyer re#uses to "ay, the insuran e #und $ill o!er the ost. *o$e!er, the em"loyer $ill then be liable to the insuran e #und. &# the em"loyer #ails to re"ay the insuran e #und, the insuran e #und $ill ha!e the right to sei7e the om"any's de"osits dire tly #rom the om"any's #inan ial institutions. For any osts not o!ered by the om"any's de"osits, the insuran e #und may sei7e om"any assets o# e9ui!alent !alue. ;0 Tort /iability The em"loyer may be liable #or !arious laims under China's tort la$. For instan e, the em"loyer might be dire tly liable #or negligen e i# the a ident o urred due to #ailure to %ee" the ar in ade9uate dri!ing ondition. Note that in su h a s enario, the dri!er and the in)ured em"loyee may ha!e a tort laims against the om"any. &n the e!ent the a ident $as aused by #ault o# the dri!er, the em"loyer may be indire tly, or !i ariously, liable #or the negligent a tions o# the dri!er. &n that ase, the dri!er $ould also be liable #or tort laims brought by the in)ured em"loyee.

The em"loyer and dri!er's "otential liability is not limited )ust to the in)ured em"loyee. .ny in)ured third "arties may also ha!e laims against the em"loyer and=or dri!er. That means i# the ar in)ures a bystander or damages "ro"erty, the bystander or o$ner o# the "ro"erty, res"e ti!ely, an bring tort(based laims against the om"any or dri!er #or damages. Essentially, $ith res"e t to tort(based damages aused by the a ident, third "arty laimants ha!e all the same auses o# a tion as the in)ured em"loyee. C0 Criminal /iability #or the 8ri!er &n the e!ent that the a ident resulted #rom negligen e and aused se!ere bodily harm or death, the dri!er may be held riminally negligent and be sub)e t to "rison time. &n addition, damaging "ubli "ro"erty or #ailure to ade9uately om"ensate third "arties #or "ro"erty damage an also result in in ar eration. -u h riminal liability is a%in to manslaughter or riminal gross negligen e liability in 2estern legal systems. 80 8e"ortation #or the 8ri!er For e,"atriates, in addition to being sub)e t to all the Chinese i!il and riminal "enalties, there is also the "ossibility o# de"ortation. . ording to .rti le >2 o# the E,it and Entry /a$, #oreigners an be de"orted under the #ollo$ing ir umstan es+ 4.0 #ailure to lea!e the ountry $ithin the sti"ulated time? 4;0 $here the "arty $as not allo$ed to enter the ountry? 4C0 illegal residen e or illegal em"loyment? 480 the "arty a ts in !iolation o# the E,it and Entry . t or other la$s, administrati!e rules and regulations? Pursuant to item 8 abo!e, the Chinese authorities are gi!en signi#i ant dis retion in de"orting #oreign nationals #or !iolations o# la$. Foreigners $ho !iolate China's la$s and regulations and are deemed 5unsuitable6 to remain in China $ill be gi!en an e,it deadline to de"art. The determination o# 5unsuitable6 is dis retionary by the authorities. &n "ra ti e, $e ha!e not en ountered any e,"ats that ha!e been de"orted #or minor tra##i in#ringements $here i!il damages to the ar are the only dis"uted laim. *o$e!er, $here riminal liability is at sta%e, #or e,am"le drun% dri!ing, authorities ha!e re ently de"orted e,"atriates. There#ore, there is a de#inite ris% o# de"ortation #or the dri!er $here !i tims o# the a ident su ess#ully bring laims #or riminal negligen e. - enario 2+ Em"loyee Car . ident *y"otheti al Fa ts+ The om"any reimburses em"loyees $ho de ide to dri!e themsel!es to $or% or #ind alternati!e trans"ortation. .n em"loyee o"ts to "arti i"ate in this "rogram. .n em"loyee is in)ured in an a ident $hile dri!ing his o$n ar to $or%.

/iability .nalysis+ .0 Co!erage by the insuran e #und The o!erage analysis is the same as in - enario 1 stated abo!e. The 3egulations ma%e no distin tion based on $ho $as o"erating the mode o# trans"ortation. There#ore, the em"loyee $ould ma%e the same laim to the insuran e #und as stated in - enario 1. .nd again, i# the in)ured em"loyee $as at all at #ault, that $ould be a mitigating #a tor $hen determining the si7e o# the in)ury reimbursement. ;0 Tort /iability The in)ured em"loyee might still ha!e a tort laim against the em"loyer. *o$e!er, "ro!ing ausation $ill most li%ely be the greatest obsta le #or the in)ured em"loyee. The em"loyee $ould ha!e to "ro!e that the em"loyer #or ed the em"loyee to, #or instan e, engage in an unreasonable number o# $or% hours, ausing the em"loyee to be "hysi ally in a"able o# sa#ely tra!eling to $or%. The ris% o# su h laims being su ess#ul is !ery lo$. The ris% o# a su ess#ul laim #rom any in)ured bystander or o$ner o# damaged "ro"erty is e9ually lo$, as again sho$ing ausation lin%ed to the em"loyer $ill be !ery di##i ult. C0 Criminal /iability @ 8e"ortation ;e ause in this s enario the em"loyee is using a trans"ortation ser!i e totally unasso iated $ith the om"any, there is no ris% o# riminal liability or de"ortation #or om"any sta##. - enario 3+ *ired 8ri!er Car . ident *y"otheti al Fa ts+ The om"any hires a "ro#essional dri!er to dri!e om"any em"loyees to and #rom $or%. .n em"loyee is in)ured in an a ident $hile being dri!en to $or% by the dri!er. /iability .nalysis+ .0 Co!erage by the insuran e #und The o!erage analysis remains un hanged #rom - enarios 1 and 2. ;0 Tort /iability The om"any's relationshi" to the dri!er is a ontra t(#or(hire, similar to the on e"t o# an inde"endent ontra tor in 2estern legal systems. ;e ause the relationshi" bet$een the em"loyer and the dri!er is ontra tual, and not an em"loyment relationshi", liability #or the a tions o# the dri!er $ill not be "assed on to the om"any. &nstead, the dri!er and the ser!i e om"any that em"loys the dri!er $ill be liable #or tort damages to the in)ured em"loyee, in)ured bystanders, and o$ners o# damaged "ro"erty. &# the dri!er $as using a om"any(o$ned( ar, the om"any

$ill ha!e laims against the dri!er and the ser!i e om"any #or damages to the ar. Note that i# the om"any did not maintain the om"any(o$ned( ar "ro"erly, the om"any may still be dire tly liable. There#ore, the ris% o# liability is lo$er $here the ser!i e om"any "ro!ides both a dri!er and a ar. Note that the ser!i e om"any and dri!er should be thoroughly !etted, as hiring a ser!i e om"any that has #ailed sa#ety tests or has unli ensed dri!ers may result in liability #or the om"any. To limit any su h "otential liability, the om"any should ma%e reasonable in9uiries into the status and 9uali#i ations o# the limo ser!i e om"any and its dri!ers. The ontra t $ith the ser!i e om"any should in lude ade9uate re"resentations by the ser!i e om"any as to the 9uali#i ations o# the ser!i e om"any. Note that on July 13 o# this year, an amendment to the Chinese /abor /a$ $ill ta%e e##e t. The amendment $ill e,tend the labor la$ so that em"loyers $ho em"loy labor(sta##ing agen ies may be liable #or the a tions o# those $or%ers em"loyed by the sta##ing agen ies. *o$e!er, gi!en that a limo ser!i e is not the ty"e o# om"any that is traditionally onsidered a sta##ing agen y, the ne$ la$ is unli%ely to a""ly to a s enario $here the om"any hires a ser!i e om"any to "ro!ide a dri!er. C0 Criminal /iability @ 8e"ortation ;e ause the om"any has no em"loyment relationshi" $ith the dri!er, the om"any's sta## $ill not ris% riminal harges or de"ortation. Ather Note$orthy Considerations+ ( Note that under the Contra t /abor /a$, i# an em"loyee is in)ured $hile tra!eling to or #rom $or%, the om"any is not allo$ed to lay(o## the em"loyee. ( Com"anies $ho do not "arti i"ate in the $or%(related in)ury insuran e #und or $ho do not oo"erate $ith in!estigations are sub)e t to the #ollo$ing "enalties+ 0.05B "er day interest "enalty #or late "ayments? a daily #ine o# 3:; 2,000(20,000 #or #ailure to oo"erate. ( The "rimary go!erning la$s #or the abo!e analysis are+ ( 2or%(3elated &n)ury &nsuran e 3egulations ( /a$ on Tort /iability ( 3oad Tra##i -a#ety /a$ ( /abor Contra t /a$