The setting will typically be the place of employment. This can be for example an office (the stereotype being boss and secretary) but can also be any other workplace. It can also be a domestic setting, e.g. the case of a house owner and their employee, e.g. a servant, houseboy or maid.
The boss's authority and the employee's submissive status can be exaggerated up to the point where things such as corporal punishment or humiliation for poor work, disobedience or disrespect become plausible. Boss/employee scenes are one way to establish a power and status difference among adult players without having to go anywhere as far as a master/slave relationship, and without the need for ageplay.
From a legal point of view, in practically all countries worldwide bosses or employers are no longer permitted to subject their subordinates to corporal punishment or degrading humiliation. Therefore such scenes may either be set in the past, or an element of semi-consensuality might be introduced (e.g. the employee is given the choice of getting fired or either accepting a the punishment), full consensuality takes place (if the employee has masochistic leanings), or the unlawful nature of such an action is just accepted as part of the scene.
If desired, the power exchange may involve disciplinary as well as sexual activities.
Drawing by Louis Malteste.
"Im Drange der Geschäfte" (In the pressure of business), artwork by Richard Hegemann.
Employee discipline videos on Spanking Tube