LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)
HAUDEN & SCHOLL BUILDERS INC, Employer
UNEMPLOYMENT INSURANCE CONTRIBUTION LIABILITY DECISION
Hearing No. S9700339MD, Account No. 351996
An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on the applicable law, records and evidence in this case, the commission makes the following:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Hauden & Scholl Builders Inc. (Hauden) is a covered employer engaged in business as a building contractor. Hauden is owned by a husband and wife, Pat Hauden and Susan Scholl. Hauden mainly does custom homes and light commercial building. Hauden serves as a "general" contractor and utilizes the services of number of individuals or "subcontractors" to do carpentry, plumbing, electrical work, and cleaning.
Hauden corrects repairs in homes for 3 or 4 years after it builds them. When working at a job site Hauden's sign is displayed. Hauden does not want subcontractors to have signs on the site because Hauden wants the promotional advantage of the sign. Hauden paid subcontractors whether or not it was paid by the customer. It provides subcontractors with 1099s.
Hauden does not provide any tools, transportation or training to subcontractors. Hauden has no say in the composition of a crew. Hauden pays subcontractors whether or not it has received payment from the customer. Hauden has been in the business for 22 years and obtains subcontractors through word of mouth. Indeed, given the state of business, Hauden would be leery of a subcontractor who needed to advertise. Subcontractors are not paid extra for having to redo work or if work takes longer than anticipated. If the subcontractor refused to fix a problem Hauden would do so. It is standard in the industry for the general contractor to supply materials such as lumber.
In 1995 Hauden asked Herbert Nelson if he would be interested in doing work for Hauden, primarily plaster patching. Mr. Nelson was retired at the time. It was agreed that Mr. Nelson would receive $50 for a patch job, regardless of how long it took him. Customers did not pay Hauden extra for Mr. Nelson's work. Hauden received only the goodwill of the customer for Mr. Nelson's work. Hauden did not instruct Mr. Nelson on how to do the work. Hauden would give Mr. Nelson the names of customers needing repairs and Mr. Nelson would contact the customer and arrange a time to patch the plaster. Occasionally, Hauden would tell Mr. Nelson to do an irate customer's job quickly. Hauden was unaware of whether Mr. Nelson did similar work for anyone else during 1995. Mr. Nelson apparently provided his own tools- trowel, ladder, and sponge. Mr. Nelson did not advertise. Hauden did not have problems with Mr. Nelson's work.
Kenneth Jacobs has been a salesperson for Brunsell lumber for 12 years. He has been Mr. Hauden's friend for 20 years. In 1995 and 1996 Mr. Jacobs built screen sections for porches for Hauden. Mr. Jacobs does not advertise his services. He does not solicit business, but does this as a favor to Mr. Hauden. Mr. Jacobs would look at the porch and quote Hauden a price based on anticipated cost of materials and time involved. Mr. Jacobs purchased the material. Mr. Jacobs would build the screen sections and a carpenter on the job would install them. The dimensions of the screens are set by the building plans. Hauden instructed Mr. Jacobs not to use treated lumber because it is not good material. Mr. Jacobs was paid when he completed the work. He used his own tools--power saw, drills, hammer--and worked in his garage making screens or at the job site building a porch. Mr. Jacobs was responsible to fix faulty work, although Hauden was ultimately responsible to the customer. If Mr. Jacobs had refused to fix a problem Hauden could have sued to get the money. However, the issue never came up in the relationship. Hauden did not instruct him how to do his work, never criticized his work, and did not set deadlines for completion of the work.
Mr. Jacobs reported his income from screen building on a Schedule C in 1995 and 1996. In 1996 Mr. Jacobs did some decks for Hauden on 2 or 3 occasions and paid some friends about $200 to help him. He did not deduct money paid to helpers. In 1995 and 1996 Mr. Jacobs did one other job for another construction company building screens for a porch. His gross income in 1995 was $2451 and in 1996 $6220. In 1996 he had income from two sources with $4827 coming from Hauden. Mr. Jacobs could lose money if the cost of materials exceeded the quoted price. He does not carry insurance for this work, relying instead on insurance from Brunsell and his home owner's insurance to cover him in the event of injury. At the time of the hearing, March 16, 1998, he had not done any screen building because he has been too busy doing other things.
In 1995 and 1996 Hauden engaged the services of Sandy Winter to clean houses before the houses were occupied by the customer. Ms. Winter would vacuum and clean sawdust out of cabinets. She determined what to charge by calling around to other cleaning businesses. Ms. Winter was paid based on square footage at a rate set by her. Ms. Winter quoted a price for extra services such as cleaning outside windows. Ms. Winter began cleaning newly constructed houses in 1992. She was cleaning new construction for another builder, along with that builder's personal home, when she was contacted by Hauden to clean Mr. Hauden's personal home. She then began cleaning Hauden's newly constructed homes. Prior to cleaning houses she worked for a newspaper. She worked for a newspaper in 1996, but not in 1995. In 1995 and 1996 she cleaned new homes only for Hauden. At the time of hearing she had 6 to 8 customers for whom she cleaned new homes. She has enough work so does not solicit additional work.
Hauden did not supply any tools or equipment to Ms. Winter. She provides her own supplies on new construction but uses the homeowner's equipment to clean existing homes. Supplies run about $15 per home. She usually uses central vacuuming at new homes, and if it is unavailable brings her own vacuum. If Ms. Winter was unavailable to clean Hauden would hire someone else. Her unavailability would not be held against her. Hauden did a walk- through inspection with the customer prior to occupancy and there was never a problem with Ms. Winter's work. However, if the work was not adequate and Hauden had to pay someone else to do it Hauden would ask Ms. Winter to reimburse it. Hauden has never instructed her on how to do the cleaning. As long as the work was done well and on time Ms. Winter could transfer the work to another person. However, Hauden would first want to know why Ms. Winter felt the other person could do the job well. The only real risk of losing money was the risk of lost opportunity if the job took longer than expected or she was called back to correct a problem, which has never happened, for which she would not be paid extra.
Ms. Winter did not file self-employment income tax returns in 1995, although she realized she should have been filing as self- employed. In 1996 she filed as self-employed. She did not have a federal employer identification number in either year. Ms. Winter's 1995 expenses were approximately $100, excluding gas it took to get to and from job sites. She lists expenses on her bills separately. She received a 1099 from Hauden. She received a check for services from Hauden. Ms. Winter does not have anything of value to sell as a going business. She does not carry any insurance for her cleaning work. She did sign an American Family Insurance form stating she was a sole proprietor or partnership, had no employes, and elected not to carry Worker's Compensation.
In 1996 Ms. Winter was paid $5234 for work performed for Hauden. Her gross income in 1996 for cleaning homes was $11,614. The only expenses she had were from services performed for Hauden and again those expenses were approximately $100 for 1996.
In 1995 and 1996 Larry Roelke, Mike Roelke, Brian Roelke, and Ralph Fry performed rough carpentry work, such as setting windows and doors, for the employer as a crew. Joel Barsness did the same in 1995. Hauden engaged the crew's services on recommendation of Kenneth Jacobs. The composition of the crew changed over time. Hauden did not have to approve a new individual on the crew. The "core" crew consisted of Larry and his sons, Mike and Brian. Hauden provided the lumber and nails and when needed, a crane truck to set trusses, which is standard in the industry. The crew provided the other tools and equipment, such as ladders and air guns. If Hauden did not like how work was done it would instruct the crew to fix it. If the crew would not fix it Hauden would not want the crew on the job. However, this never came up. Hauden would approach whoever was on the job if there was a problem. The crew was not entitled to more money if the crew encountered a problem. Hauden dealt directly with Larry Roelke many times because Mr. Hauden has worked with Larry for 13 years. Larry would correct a less experienced crew member's work if he saw the individual doing something wrong.
The crew charged on a square foot rate that was fairly standard. The entire crew would apprise Hauden of price increases, which Hauden needed to be aware of when bidding a job. The crew was paid when the job was completed. The crew determined how the payment was divided among crew members. For example, Larry would get 25% and the rest 18.75%, regardless of the amount of time they spent on the job, as long as it was reasonable. Larry got a higher percentage because he did the layout which involves looking at the blueprint to determine where plates and studs should go. The crew would present a list of workers to Hauden and indicate how much each worker was to receive. A similar payment arrangement existed with other contractors. Hauden would issue a check to each individual crew member. Hauden issued each crew member a 1099 for 1995 and 1996. If a crew member missed a day his pay was not docked. If Hauden wanted a crew member off the job the crew would have to work somewhere else.
The crew worked for other builders in 1995 and 1996. The crew had the same other customers in 1995 as it had in 1996. If two customers wanted the crew at the same time the crew would go with the customer it had an agreement with first. Crew members had an equal say in whether work would be accepted or rejected. The crew would "hear" of new work on jobs and either Larry or his sons would go and see the builder. The crew would line up jobs, look at blueprints and decide whether to take a job. Everyone made suggestions on different methods to use on the job. Equipment was shared. Larry provided saws, compressor, air guns, levels, and most of the ladders. Larry owned a tools trailer that was kept on jobs and the crew shared one anothers' tools. Larry had "more involved" tools such as a compressor. The other crew members had their own hand and power tools. The crew members had their own liability insurance.
Larry Roelke had his own unemployment insurance account for 10-15 years. When operating his business he paid his crew on an hourly basis. Larry closed the business and his account in the mid to early 1990's. He went on working by himself. (1) Larry performed services for Hauden in 1995 and 1996, and had performed services for Hauden in prior years when he had his own business.
Larry filed self-employment income tax returns in 1995 and 1996. He utilized deductions such as for tools and materials. His tools would be the only things he could sell if he wanted to get out of the business. He spends about $500 to $600 in tool replacement per year. The work he performs is relatively free of expenses, outside of the expense of getting to the job site. Larry did not actively seek work. Work came to him because of his years in the industry and through friends.
Mr. Barsness joined the crew after speaking with Larry and Ralph Fry. Mr. Fry knew Mr. Barsness before Fry joined the crew. Before working on the crew Mr. Barsness was a carpenter and an employe. Mr. Barsness signed an American Family Insurance form stating that he was a sole proprietor or partnership, had no employes, and did not elect to carry Worker's Compensation. Mr. Barsness had insurance through Frankenmuth Mutual. The crew did not need Hauden's approval to let Mr. Barsness join the crew. Mr. Barsness left after finishing one house for Hauden.
Ralph Fry has been employed as a carpenter for Carpenter Glass since October of 1996. Before that employment he worked with Larry, Brian, and Mike beginning in 1993. He joined the crew by asking Larry if Larry needed any help. Before working with the crew he worked making furniture. He did not solicit other work during 1995 and 1996. He did not work in 1995 or 1996 other than with the crew, although he was free to do so, because he had enough work with that crew. He did work on jobs other than for Hauden. He was not previously involved in the building trade. He bought tools and equipment especially for working in the building trade. He bought tools such as saws, levels, and hammers. Mr. Fry was free to refuse to work on a job, but never did so. Mr. Fry, having the least experience, would defer to the suggestions of others. Larry did not criticize his work or tell him to do things differently. He stopped working for the crew because he wanted health insurance.
Mr. Fry filed self-employment income tax returns in both 1995 and 1996. Mr. Fry signed an American Family Insurance form stating that he was a sole proprietorship or partnership, had no employes, and elected not to carry Worker's Compensation on himself. Mr. Fry had insurance through Frankenmuth Mutual.
Brian Roelke is currently working as a rough carpenter with a crew consisting of Larry, Mike Roelke, and another individual. He has done rough carpentry on and off for 20 years. From 1989 to 1995, he was in the daycare business which was totally unrelated to his carpentry work. In 1995 and 1996 he did work for Hauden as a member of the crew. He also worked with the crew for other contractors.
Brian had previously worked for Larry as an employe when Larry had a business. He had more input as a crew member than as an employe and the method of payment was different. Brian supplied hand and power tools, including saws, drills, compressor and air guns. Brian also worked jobs on his own and Mike Roelke helped him when needed. Seventy to eighty percent of Brian's income came from work with the crew. Brian has a cabinet building business that he operates out of his home. That business is unrelated to his work with the crew. He grossed $8,833 from cabinet making in 1995 and $5,675.10 for work with the crew for Hauden. Brian bought his own insurance. He signed an American Family Insurance form stating he was a sole proprietor or partnership, had no employes, and elected not to carry Worker's Compensation.
Brian filed self-employment income tax returns in 1996. He grossed about $15,731. He had about $2,000 in tool and equipment replacement in that year, but the more complex tools were for the cabinetry business. The majority of Brian's income in 1996 was for work done for Hauden. He did do some side jobs such as building decks. He also built a house for his aunt in Florida but did not get paid. Brian solicited business on his own in 1995 and 1996. He has a business card, which has his name, address and phone number, and reads "Toddling Bear Home Care General Contractor." He did not use the card to get work for the crew. Rather he used it to get remodeling work--kitchen repairs, decks, door and window replacements, which he has done for 5 or 6 years. About 20% of his income in 1995 and 1996 came from the remodeling business and 70% to 80% from work on the crew. He does no advertising outside of his business cards.
A two-step analysis is used to determine whether an individual is an employe. Goldberg v. DILHR, 168 Wis. 2d 621, 625 (Ct. App. 1992). The first step is to determine whether the individual has been performing services for an employing unit, in an employment. Wis. Stat. § 108.02(12)(a). An "employment" is "any service . . . performed . . . for pay." Wis. Stat. § 108.02(15)(a). If this test is met, then (with exceptions not applicable here) the burden shifts to the employer to satisfy the department that the individual is excepted from employe status under Wis. Stat. § 108.02(12)(b).
For services performed before December 31, 1995, Wis. Stat. § 108.02(12)(b) provides that Wis. Stat. § 108.02(12)(a) did not apply to an individual performing services if the employing unit satisfies the department:
1. That such individual has been and will continue to be free from the employing unit's control or direction over the performance of his or her services both under his or her contract and in fact; and
2. That such services have been performed in an independently established trade, business or profession in which the individual is customarily engaged.
Five interrelated factors must be taken into account in determining whether the independently established statutory condition has been satisfied. Those factors are (1) integration - the degree to which the services provided directly relate to the alleged employer's business, (2) advertising or holding out - whether the purported employe advertises or holds himself/herself out to the public or to a certain class as an independent business, (3) entrepreneurial risk - whether the employe has assumed the financial risk of the undertaking, (4) economic dependence - the degree to which the employe performed the services for others in addition to performing them for the alleged employer, and (5) proprietary interest - whether, in addition to ownership of tangible assets such as tools, the individual has proprietary control such as the ability to sell or give away some part of the business. Keeler v. LIRC, 154 Wis. 2d 626, 633-634, 453 N.W.2d 902 (Ct. App. 1990). The weight and importance of these factors varies according to the specific facts of each case and the guidelines are not to be mechanically applied. 154 Wis. 2d at 634.
For services performed after December 31, 1995, Wis. Stat. § 108.02(12)(b), provides that Wis. Stat. § 108.02(12)(a) does not apply to an individual performing services if the employing unit satisfies the department that:
1. The individual:
a. Holds or has applied for an employer identification number with the federal internal revenue service; or
b. Has filed business or self-employment income tax returns with the federal internal revenue service based on such services in the previous year; and
2. The individual meets 6 or more of the following conditions:
a. The individual maintains a separate business with his or her own office, equipment, materials and other facilities.
b. The individual operates under contracts to perform specific services for specific amounts of money and under which the individual controls the means and method of performing the services.
c. The individual incurs the main expenses related to the services that he or she performs under contract.
d. The individual is responsible for the satisfactory completion of the services that he or she contracts to perform and is liable for a failure to satisfactorily complete the services.
e. The individual receives compensation for services performed under a contract on a commission or per-job or competitive-bid basis and not on any other basis.
f. The individual may realize a profit or suffer a loss under contracts to perform services.
g. The individual has recurring business liabilities or obligations.
h. The success or failure of the individual's business depends on the relationship of business receipts to expenditures.
For both years, an additional employe exception applied. Wis. Stat. § 108.02(12)(e), provides:
(e) Paragraph (a) does not apply to a contractor who, in fulfillment of a contract with an employing unit, employe any individual in employment for which the contractor is subject to the contribution or reimbursement provisions of this chapter.
Whether a contractor is subject to chapter 108 is determined by Wis. Stat. § 108.02(13)(e), which provides:
(e) Any other employing unit, except a government unit, shall become an employer as of the beginning of any calendar year if the employing unit:
1. Paid or incurred liability to pay wages for employment which totaled $1,500 or more during any quarter in either that year or the preceding calendar year: or
2. Employed at least one individual in some employment in each of 20 or more calendar weeks in either that year or the preceding calendar year, whether or not the same individual was in employment in each such week and whether or not such weeks were consecutive . . . .
In Robert Hansen Trucking v. LIRC, 126 Wis. 2d 323 (1985), the Wisconsin Supreme Court held that contractors who are covered employers are not to be considered employes of the principal under paragraph (e). The Court stated that in excepting contractors who are covered employers from being considered employes, paragraph (e) contemplates that contractors will be liable for the unemployment compensation of individuals they hire. Since Hansen, the commission has almost uniformly held that the contractor is the employer based on a mechanical application of the "dollars and weeks" test of Wis. Stat. § 108.02(13)(e). Further, the contract referred to in Wis. Stat. § 108.02(12)(e), need not be written or express but can be implied.
Mr. Nelson did not appear at the hearing. (2) Hauden agreed that it paid Mr. Nelson for doing plaster repair. There was little if any evidence that Hauden exercised or retained the right to exercise direction or control over Mr. Nelson's services. However, Hauden simply did not offer enough evidence to establish that Mr. Nelson performed services for it as part of an independently established business. In fact, Mr. Topp testified that he bought Mr. Nelson's business and took it over. It appears that Mr. Nelson had previously been independently engaged in business, but had ceased such business by the time he performed services for Hauden. There is simply no evidence that at the time Mr. Nelson performed services for Hauden he was advertising or holding himself out as being in an independent business, had a proprietary interest in an ongoing business, undertook entrepreneurial risk, and was working elsewhere or able to work elsewhere in his ongoing business. Accordingly, the commission finds that Mr. Nelson was an employe of Hauden & Scholl in 1995.
Sandy Winter was paid by Hauden for performing cleaning in new construction. There was little if any evidence that Hauden controlled or directed, or retained the right to control or direct the actual performance of her services. Applying the Keeler factors to her services in 1995, the commission finds that she was an independent contractor. Integration is not significant here. While certainly the Hauden wants someone to clean the home, its core business is construction, not cleaning. Ms. Winter does not advertise but she does not need to. The number of clients she has demonstrates that she is known in the business. This is basically a business that relies on labor. To the extent equipment and materials are used Ms. Winters generally supplies the same. Further, she has an existing clientele that she could sell as a going concern. The entrepreneurial risk involved in the type of activity engaged in by Ms. Winters is small and the commission gives little weight to that factor. Finally, she has performed and does perform services for others. The commission finds that in 1995 Ms. Winter was an independent contractor.
However, the commission finds that in 1996 Ms. Winter was an employe as she did not file a self-employment tax return in 1995, nor does she have a federal employer identification number. The ALJ found it sufficient that Ms. Winter acknowledged that she should have filed as self employed. However, the statute does not provide a good cause standard or any like standard for failing to file as self employed. Therefore, the mandatory factor has not been satisfied and Ms. Winter cannot be found to be an independent contractor in 1996.
Mr. Jacobs was paid by Hauden to perform services in 1995 and 1996. For 1995, clearly there was some integration. He does not hold out as being in an independent business nor does he advertise. However, Mr. Jacobs has set up a shop in his garage, has his own tools, and most significantly, incurs substantial expenses relating to materials giving him the more tangible indications of proprietary interest. It is the same substantial investment in materials that subjects him to financial risk. Despite Mr. Jacobs' opinion that he could not lose money, he could given that 2/3rds of the money he receives goes toward material expenses. Further, he has hired helpers which increases financial risk. The commission finds that in 1995 Mr. Jacobs was an independent contractor.
Applying the 1996 test to Mr. Jacobs services the commission again finds that he worked as an independent contractor. He meets the mandatory factor as he filed as self employed in 1995. Mr. Jacobs satisfies par. (a) as he works in his garage and uses his own equipment. He performs a specific service for a specified amount and controls the means and methods thus satisfying par. (b). He clearly incurs the main expenses (materials) related to the services which satisfies par. (c). Mr. Jacobs was responsible to fix faulty work. A valid distinction between an employe and independent contractor is that as an employe one can be required to redo work but the employer must pay for the additional service and cannot deduct from an employe's wages for faulty workmanship. There is no indication that Mr. Jacobs would receive additional compensation for redoing work thus satisfying par. (d). Mr. Jacobs works on a per job basis for Hauden and bids the work thus satisfying par. (e). While Mr. Jacobs was of the opinion that he could not lose money because of his expertise, the fact is that 2/3rds of the money he receives goes to material costs and underestimating those costs can result in a loss. In addition, paying helpers as he did in 1996 further shrinks the profit margin. The commission finds that par. (f) has been satisfied. Six of the eight conditions of Wis. Stat. § 108.02(12)(b)2. have been satisfied. Therefore, Mr. Jacobs meets the definition of independent contractor in 1996.
Hauden paid Larry Roelke for services performed in 1995 and 1996. Larry's services were clearly integrated into Hauden's business. Larry did not formally advertise but he did hold himself out to general contractors as being in an independent business. The risk of loss was not great as it would be if there was a significant capital investment. However, Larry did have an investment in tools/equipment and expenses associated with replacing those items and getting to the job sites, along with insurance costs. Payment was based on a bid for a job which contained the potential for lost opportunity to perform work elsewhere if the job took longer than normal. Larry's business could continue to survive without the relationship with Hauden, as Larry had the necessary tools and equipment to move on to work for others. In fact, Larry has done so. While he could not sell his expertise, the tools and equipment he had would enable another to continue the same type of services. Overall, the evidence demonstrates that if Larry's relationship with Hauden were to end, Larry's business would survive. Weighing all the factors the commission finds that Larry performed services in 1995 as an independent contractor.
Larry filed self-employment tax returns in 1995 satisfying the mandatory factor for finding him to be an independent contractor in 1996. Larry had his own tools and equipment. He did not have an office but none was required nor even expected for performing such services, par. (a) has been met. Larry performed under a contract to perform specific services for specific amounts of money and controlled the means and methods of performing such services, par. (b) has been met. Larry incurred the main expenses related to performing the services, namely, tools. While Hauden supplied the lumber, such was standard in the industry and not an expense borne by a rough carpentry contractor, par. (c) has been met. Larry was liable for the satisfactory completion of the services and is liable for failure to complete those services satisfactorily, par. (d) has been met. Those services were performed on a per-job basis, par. (e) has been met. There was little real profit or loss potential in performing services, par. (f) has not been met. Larry did have recurring business obligations such as liability insurance and cost of equipment replacement, par. (g) has been met. Finally, the success of Larry's business depends on the relationship of receipts to expenditures. This is not a hobby or a charitable undertaking for Larry. Larry's services meet at least six of the conditions set forth in Wis. Stat. § 108.02(12)(b)2.
As between Hauden and Larry, Larry must be found to be the employer of any individuals hired to perform rough carpentry work in 1995 and 1996. Mr. Barsness is at issue only for 1995. The audit sheets list payroll attributed to his services working on a building for Hauden as $9,157.50. Based on his income from working on the crew for Hauden, he was paid over $1500 in at least one quarter in 1995. This makes Roelke a contractor under Wis. Stat. § 108.02(12)(e). Based on payroll reflected in the audit sheets, beginning at least in 1995 Larry was the employer, unless Larry establishes that such services were performed as independent contractor.
Mr. Barsness' services were integrated in the work performed by Larry. There is no evidence that Mr. Barsness advertised, or held himself out as being in an independent business. Indeed, the testimony was that prior to working for the crew Mr. Barsness was an employe. There was no testimony that he continued to engage in rough carpentry work, let alone in an independent business, after leaving the crew. The evidence was simply insufficient to find that he undertook entrepreneurial risk, or had a proprietary interest in a business.
Mike Roelke did not appear at the hearing. For 1995, based on testimony regarding the crew members in general, Mike was free from direction and control. His work was integrated into Larry's business activity. He did not advertise but was known in the industry and to contractors as being in the business of rough carpentry. As part of the crew he worked for contractors other than Hauden. He had the same types of tools as the others. He also had his own liability insurance. Evidence on entrepreneurial risk was not strong. Weighing all the applicable factors the commission finds that Mike Roelke performed services in 1995 as an independent contractor. However, there was no nonhearsay testimony to establish that he filed self-employment income tax returns in 1995 or had or applied for a federal employer identification number. Therefore, Mike Roelke has not met a mandatory factor for 1996 and must be considered an employe of Larry Roelke.
The commission finds that Brian Roelke and Mr. Fry were independent contractors in both 1995 and 1996. For 1995, while they might receive "advice" on how to do or fix something, they were in the main free from direction and control and actually themselves directed and controlled the work. Integration exists and therefore does not point toward independent contractor status. They generally did not advertise but this was because they had enough work and did not need to advertise because they were known by other contractors. They held themselves out to a certain class, contractors, as being in an independent business. The main risk was lost opportunity in that it might take them longer to complete a project than anticipated. Further, they could be made to fix things without additional compensation. They were part of the crew that performed services for contractors other than Hauden showing that they did work for one entity and moved on to perform similar work for others. Proprietary interest was mainly of the tangible kind, hand tools, but the nature of the business again focused on labor. In addition, they carried liability insurance.
Brian Roelke and Mr. Fry both filed self-employment returns in 1995 satisfying the mandatory factor for their 1996 services. They have been doing this work for years prior to 1995. Each had their own equipment (separate facilities or an office was not necessary for doing the work), par. (a) has been met. They worked performing services for a specific amount and controlled the means and methods of their work, par. (b) has been met. As rough carpenters they did incur the main expenses related to the work such as tools, transportation, and insurance, par. (c) has been met. They were responsible for the satisfactory completion of work and could be directed to fix any problems, par. (d) has been met. They received compensation on a per job basis, par. (e) has been met. Again, there was little if any potential for profit or loss, par. (f) has not been met. They both had recurring obligations such as equipment replacement expenses and insurance, par. (g) has been met. The evidence indicates that both undertook to perform such services as a business and not a hobby, par. (h) has been met. Thus, they meet at least six of the eight mandatory conditions.
The commission therefore finds that in 1995 Larry Roelke, Brian Roelke, Mike Roelke, Kenneth Jacobs, Ralph Fry, and Sandy Winter performed services as independent contractors and not as employes within the meaning of Wis. Stat. § 108.02(12).
The commission further finds that in 1995 Herbert Nelson performed services for Hauden & Scholl Builders Inc., as and employe and not as an independent contractor within the meaning of Wis. Stat. § 108.02(12).
The commission further finds that in 1995 Joel Barsness performed services as an employe of Larry Roelke within the meaning of Wis. Stat. § 108.02(12) and Wis. Stat. § 108.02(13).
The commission further finds that in 1996 Mike Roelke performed services for Larry Roelke as an employe within the meaning of Wis. Stat. § 108.02(12) and Wis. Stat. § 108.02(13).
The commission further finds that in 1996 Sandy Winter performed services for Hauden & Scholl Builders Inc., as an employe and not as an independent contractor within the meaning of Wis. Stat. § 108.02(12).
The commission further finds that in 1996 Larry Roelke, Brian Roelke, Kenneth Jacobs, and Ralph Fry performed services as independent contractors and not as employes within the meaning of Wis. Stat. § 108.02(12).
The decision of the administrative law judge is reversed in part and affirmed in part. Accordingly, Herbert Nelson performed services as an employe of Hauden & Scholl in 1995; Sandy Winter performed services as an employe of Hauden & Scholl in 1996; Joel Barsness performed services as an employe of Larry Roelke in 1995; and Mike Roelke performed services as an employe of Larry Roelke in 1996.
Dated and mailed: August 31, 1998
haudens.srr : 132 : 1 EE 410 EE 410.03 EE 410.05 EE 410.06 EE 411 EE 445
David B. Falstad, Chairman
/s/ Pamela I. Anderson, Commissioner
/s/ James A. Rutkowski, Commissioner
The commission did not discuss witness credibility and demeanor with the administrative law judge. The commission's decision does not rest on any differing assessment of witness credibility but on reaching a different legal conclusion when applying the law to the facts.
ATTORNEY JAY D KORITZINSKY
ATTORNEY PETER W ZEEH
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(1)( Back ) The first three sentences of Larry's testimony are based on the ALJ's notes as the tape recorder was turned off at the beginning of Larry's testimony.
(2)( Back ) Mr. Nelson received very little mention in the ATD and no mention in the department's petition. However, the record does not reflect a stipulation as to his status.