COUNTY OF DOOR, Employer
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 its review, the commission makes the following:
Susan A. is a 63-year old woman. When she was 22 years old, she was in an automobile accident and suffered severe injuries to her head which left her blind and also cognitively impaired as a result of brain damage. As a result of her condition, Susan has required some degree of personal care on a 24-hour/day basis. Her cognitive impairments were severe enough that she was placed under guardianship. Her brother is the guardian of both her person and her estate.
For much of her adult life, Susan lived in a variety of facilities and institutions in the eastern U.S., where she had been living at the time of her accident. In the early 1990's her family, which lives in the Sturgeon Bay area, decided they wanted to have her closer to home, and they arranged to have her relocated back to Wisconsin.
Prior to Susan's return to Wisconsin, her family, acting through a family corporation, had built a building containing residential condominiums, called "Strawberry Creek" and located on Tacoma Beach Road in Sturgeon Bay. Susan was then returned to the Sturgeon Bay area in approximately 1993 or 1994. Initially, she was placed in and resided in a residence in Brown County. However, she was then moved to one of the "Strawberry Creek" condominiums. Susan began living in that condo in approximately 1994 to 1996. She has continued to live in that condo since that time. The condo is owned by the family corporation, which has granted a life interest in the property to Susan.
In connection with their efforts to return Susan to the Sturgeon Bay area, Susan's family had contacted and begun working with the Door County ("County"), through its Department of Community Programs, about getting Susan into some situation where she could receive services through that Door County's social services program
The County filed an application for, and was granted, certain Medicaid funds (state and matching federal) for use on Susan's behalf. These funds, which amounted to $5,200/mo, were granted pursuant to what is referred to as the "Brain Injury Waiver" (BIW) program. The BIW funds granted for Susan went directly to the County. They could not be given directly to Susan or to her guardian. They were required to be administered through the County and to be paid for care of Susan. BIW funds come with a mandate requiring the County to assign a case manager or service coordinator to the person for whose benefit the funds are granted, and to ensure that the placement and care of that person, towards which the funds will be applied, meet a range of standards governing matters including the residential placement of the person.
The County considered a number of options for providing the significant level of care which Susan needed. While the care could have been provided by arranging for Susan to be placed in a nursing home, the funding available would not have paid for that. Having Susan live in her own residence, with paid staff coming into her home on a rotating basis to care for her, would have been "cost prohibited" based on the funding the County was receiving for Susan. It was eventually decided that the County would set up an arrangement in which Susan would be deemed to be receiving adult foster care in an "Adult Family Home."
Adult Family Homes are provided for by statute (Wis. Stat. § § 50.01(1), 50.032, 50.033), and they are extensively regulated by rules of the Department of Health and Family Services (Wis. Admin. Code Chs. HFS 82, 83). By statute, an Adult Family Home is defined as a private residence where care and maintenance above the level of room and board but not including nursing care is provided to an adult or adults by a care provider whose primary domicile is that residence. Wis. Stat. § 50.01(1).
In September, 1998, the County approached Vicki Hoosier and asked her if she would like to perform care services for Susan. At this time, Hoosier was employed as the Director of Care For All Ages, a home for the elderly. Hoosier was acquainted with Susan because she had received services from Care For All Ages at some point. Hoosier agreed, and she quit her employment with Care For All Ages and began providing services to Susan. The County had also approached another individual, Amy Komoroske, about providing services for Susan on the same terms, and she had also agreed.
The County had Hoosier and Komoroske file an application to become an Adult Family Home, and in October, 1998, the County issued an "Adult Family Home Certificate" stating that "the home of Vicky Hoosier, Amy Komoroske & Susan [A.]" located at 1500 Tacoma Beach Road, was approved as an Adult Family Home. The County also entered into an written agreement with Hoosier and Komoroske (denominated an "Admission And Rate Agreement") in November, 1998, governing numerous details of the relationship between Hoosier and Komoroske and the County and of the care which Hoosier and Komoroske were to provide to Susan.
Hoosier and Komoroske then began providing care for Susan. They provided this care for Susan in her condo, where she continued to reside. Hoosier and Komoroske would take turns living in Susan's condo for periods of one week each, rotating with one another. However, Hoosier and Komoroske each had their own separate homes, where they continued to live when they were not staying at Susan's condo in order to care for her.
At some point prior to March, 2000, Hoosier's sister Cheryl Paul began providing services for Susan on an occasional basis, as a temporary "respite" substitute for Komoroske. When Komoroske decided she wanted to quit performing the services, the County asked Paul if she wanted to take over for Komoroske, and she agreed.
In March, 2000, the County issued another "Adult Family Home Certificate," this one stating that "the home of Susan [A.] with the support of Cheryl Paul and Vicki Hoosier" was approved as an Adult Family Home. The County also entered into an another "Admission And Rate Agreement," this one with Hoosier and Paul, governing details of the relationship between Hoosier and Paul and the County and of the care which Hoosier and Paul were to provide to Susan.
The agreement entered into between the County and Hoosier and Paul in 2000 was identical or similar in most respects to the agreement which had been entered into with Hoosier and Komoroske in 1998. One difference, however, was that because of concerns over the fact that the arrangement involved care being provided to Susan in her home by caregivers who had their own residences elsewhere, language was added to the agreement purporting to require the caregivers to "maintain Susan's residence . . . as the primary residence". Notwithstanding this, Hoosier and Paul in fact continued to maintain their own residences where they lived when they were not on duty at Susan's condo.
In 2001, 2002 and 2003 the County again entered into agreements with Hoosier and Paul concerning their providing care to Susan, and again issued "Adult Family Home Certificates" declaring Susan's condo to be an "adult family home". The agreements were denominated "Adult Family Home Memorandum Of Agreement." The certificates issued in 2001 and 2002 stated that they were certifying "the home of Susan [A.], Cheryl Paul and Vicki Hoosier", and the certificate issued in 2003 stated that it was certifying "the home of Susan [A.]". Hoosier and Paul continued to provide services to Susan in her condo pursuant to these agreements, on similar terms, during this time.
During the entire time period at issue, Hoosier and Paul would each spend every other week (alternating with each other) living at Susan's condo and helping her with all of the aspects of daily living with which she needed assistance. During these one-week periods, Hoosier and Paul would be present at the condo at all times that Susan was there (except for periods of time when they would arrange for the presence of a respite care worker to stand in for them so that they could take some time off duty). They would basically do all of the things normally involved in running a household, such as making and serving meals, and doing laundry, cleaning, and housekeeping. In the course of this they would work with Susan to help her to participate in many of these kinds of activities, to the extent that she was able to considering her limitations. They also helped Susan with a range of recreational activities, and would also take her out for a range of outside social activities, such as going to places such as the YWCA for exercise, shopping and travel.
During the entire period that Hoosier and Paul provided services as described above, the County paid Hoosier and Paul the sum of $2,600/month each for the services they provided to Susan, using the BIW funds it received to be used for Susan's benefit. These amounts were paid by way separate checks, issued on the account of Door County, to Paul and Hoosier, on a schedule determined by the County.
Also pursuant to their agreements with the County, Hoosier and Paul were each responsible for paying the sum of $300/month, identified as being for their share of household expenses. This payment was made to Susan's brother. He then paid back Hoosier and Paul each the sum of $150/month, this identified as being for Susan's share of household expenses. The family corporation of Susan's family was responsible for homeowner's or renter's insurance. The adult family home was required to provide the corporation with the monthly household bills, which were paid by the corporation.
Hoosier and Paul continued to perform services for Susan in her home until May, 2003, when the relationship was unilaterally terminated by the County.
The question for decision is whether Hoosier and Paul performed services for Door County as its "employees" within the meaning of Wis. Stat. § 108.02(12). By stipulation of the parties, this question is limited to the period from January 1, 2001 through May of 2003.
Did Hoosier and Paul perform services "for" the County within the meaning of Wis. Stat § 108.02(12)(a)? --
The determination of employee status is a multi-step process. The first step is to determine whether Hoosier and Paul were employees within the meaning of Wis. Stat. § 108.02(12)(a), which provides as follows:
"Employee" means any individual who is or has been performing services for an employing unit, in an employment, whether or not the individual is paid directly by such employing unit; except as provided in par. (b), (bm), (c) or (d). (1)
"Employment" is broadly defined by Wis. Stat. § 108.02(15) as service performed by an individual for pay, subject to certain exclusions not applicable here. There is no question that the County is an employing unit, that Hoosier and Paul are individuals that performed services, and that they were paid by the County. (2) The more difficult question is whether Hoosier and Paul performed services "for" the County. The County argued that Hoosier and Paul did not perform services "for" the County, but for Susan.
A number of circuit court decisions involving the status of persons providing services for disabled individuals under the auspices of county social service departments, in situations like that of Hoosier and Paul, have specifically addressed the question of whether such persons could be considered to be doing so "for" the county.
In Milwaukee County v. DILHR and Moore (Dane Co. Cir. Ct., No. 136-210, December 28, 1972), the individual whose status was at issue provided housekeeping services in the home of welfare recipient (an unmarried mother of three young children, receiving AFDC benefits, and with medical problems necessitating 24 hour care). The individual at issue was paid by the county to provide the services to the welfare recipient and was subject to rules of and oversight by the county. The court affirmed a decision that the caregiver provided services for the county rather than the client.
Milwaukee County v. DILHR and Anderson (Dane Co. Cir. Ct., No. 141-413, March 29, 1974) was another case involving a person providing housekeeping services to a welfare recipient. The individual was paid by the county, and representatives of the county periodically visited the home. In this case, the court affirmed the decision that the caregiver provided services for the county rather than the client. The court endorsed the principle that "an employer may employ an employee and send him to work for another person, without losing him as an employee because the other person derives a benefit from the employee's work". The court also said:
Plaintiff [the County] contends that it got no benefit from Mrs. Anderson's work. But it did in the sense that it undertook to furnish someone to do the work, and sent Mrs. Anderson to do it, and plaintiff did retain the right to supervise. Plaintiff contends it did not control Mrs. Anderson but merely watched to see that its money paid to Mrs. Anderson was being properly spent. Implied in this supervision is the right retained in the plaintiff to terminate the employment by cutting off Mrs. Anderson's paycheck. We think that the Commission had the right to infer from the evidence that Mrs. Anderson performed services for plaintiff.
Eau Claire County v. LIRC and Dachel (Eau Claire Co. Cir. Ct., No. 80CV704, July 20, 1981) also involved an individual performing housekeeping services for a recipient of a county welfare program. It is apparent from the court's discussion of the issues that the person in whose home the housekeeping services were provided was subject to some disability and would not be able to maintain a household without such assistance. The court said:
As to whether Doris Dachel performed any services for the County . . . it is my conclusion that she did perform services. She performed services of the nature which permitted the recipient, the individual, to remain at home or in an apartment out of an institution. It may not have lowered the overall cost of government to the County because apparently if the recipient of the housekeeping services were to go into an institution the cost of that would be assumed by the State and Federal governments and not the County government; nevertheless the County made the decision to enter into the program and see that those services were granted. One may conclude that the County determined that it was of benefit to the community to assist people to remain in their homes rather than be institutionalized. Once the County makes that decision then it assumes the legal and financial consequences that may flow from that decision even though it may not have actually anticipated all of those burdens at the time the decision was made.
Dane County v. LIRC and Welcome (Dane Co. Cir. Ct., No. 82CV4351, May 15, 1983) involved a live-in attendant, performing supportive home care for a person with a disability. The court affirmed a decision that the caregiver provided services for the county. The services were ultimately funded by federal money coming to the county which it then disbursed for the benefit of the disabled person, including paying for the supportive services she received in her home. The court noted:
The [County's] argument is this: because the LIRC found that Welcome performed services for Gaulke, it could not also find that he was an employe of, and thus performing services for Dane County. It is clear; however, that Welcome was responsible to both Gaulke and the County. As the Commission indicated: "(W)ithout the employer's participation, the employment herein would not have existed." LIRC was entitled, on the credible evidence in this case, to ascertain that while Welcome provided services to Gaulke, he also "performed services" to the County, and, as such, was its employee.
These decisions are persuasive. While the specific programs under which the funds originated and the care was provided were somewhat different in these cases than in the case of Hoosier and Paul, the general principles are the same. These cases establish that, notwithstanding that a disabled person derives a benefit from care being provided to them under the auspices of a county program, it is appropriate to conclude that in such cases the services are being provided "for" the county -- which bears the responsibility for seeing to it that such care is provided, and which arranges for and oversees the provision of such care. Here, as in the cases just discussed, the County benefited from the services being provided by Hoosier and Paul, in that pursuant to its application for the BIW funds, the County had assumed an obligation to see to Susan's care. The care provided by Hoosier and Paul to Susan met the County's obligation.
In addition to the foregoing, the conclusion that Hoosier and Paul provided services "for" the County is also consistent with the recent decision of the Wisconsin Supreme Court in Acuity Mutual Ins. Co. v. Olivas, 2007 WI 12, 726 N.W.2d 258. That case involved inter alia an issue as to who was the employer of certain individuals who had been found to be employees under the provision of the Worker's Compensation Act defining covered employment and distinguishing covered employees from independent contractors. Like the parallel provision in the UC Act, § 108.02(12)(a), the WC Act's definition of "employee" involves the question of who an individual performs services "for." In Olivas, the Supreme Court reemphasized its holdings in previous decisions, including Kress Packing v. Kottwitz, 61 Wis. 2d 175,182, 212 N.W.2d 97 (1973), that the most important consideration in resolving such questions was the presence or absence of a right to control the details of the work. The Court noted that LIRC had generally followed this approach, citing to LIRC's decision in Nickell v. Kewaunee County & Fireman's Fund (LIRC, Sep. 24, 1996), a WC case in which it was found that a person providing supportive personal services in another individual's home in an arrangement in which the county played a part, was "in the service of" the county for purposes of determining if she was the county's employee.
The County had significant control over how Hoosier and Paul performed their services. The County's control was evidenced in numerous ways in the record. All of the "Adult Family Home Certificates" issued by the County in this case stated that the home would be "under the supervision of" the County. The "Adult Family Home Memorand[a] Of Agreement" covering the years at issue here were by and between Hoosier and Paul, and the County, and only them. Those agreements all contained detailed specifications of and expectations for the services to be provided by the caregivers. The County provided the caregivers with documents entitled "Roles and Responsibilities" and "Rights of Residents" which they described as defining what the responsibilities and expectations of an adult family home caregiver were. In addition to this evidence in the documentary record, the testimony of the witnesses made it quite clear that the County exercised very significant control over exactly what services were provided by Hoosier and Paul to Susan and how those services were provided. Hoosier and Paul testified to numerous indicia of control being exercised over them by the County: the requirement to file various kinds of reports, periodic inspection visits both by a County nurse and by Zellner-Ehlers, periodic required meetings with County representatives, a requirement that use of any other individuals to cover their duties temporarily (respite care) be approved by Zellner-Ehlers, requirements that they take Susan to certain specified activities, requirements that they obtain approval before taking her to other activities (approval that might not always be granted), a requirement applied to Paul that she participate in certain "care provider" training dictated by the County, and expectations communicated to them about how much they should attempt to involve Susan in helping with routine tasks around the home. Zellner-Ehlers acknowledged that the County had a responsibility to make sure that Susan's individualized service plan was followed by the Adult Family Home (in other words, by Hoosier and Paul) and to exercise basic oversight over the home. By contrast, Susan's brother and other family members exercised very little control of that nature. Susan's brother testified that he had no role in finding Hoosier and Paul, that he did not exercise any supervision over the services performed by them, and that Cindy Zellner-Ehlers, of Door County, supervised the operation of the home.
For all the foregoing reasons, the commission concludes that Hoosier and Paul performed services "for" the County within the meaning of § 108.02(12)(a). Thus, a presumption arises under that subsection that they were employees of the County.
Did the County establish that the conditions of § 108.02(12)(c)1. and 2. were satisfied so as to rebut the presumption that Hoosier and Paul were its employees? --
The presumption that Hoosier and Paul were employees of the County prevails unless the County satisfactorily demonstrates that they were exempted from employee status under subsection (c) of Wis. Stat. § 108.02(12), which provides as follows:
(c) Paragraph (a) shall not apply to an individual performing services for a government unit or nonprofit organization, or for any other employing unit in a capacity as a logger or trucker if the employing unit satisfied 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.
Direction and Control -- The first question presented under § 108.02(12)(c) is whether an 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. Here, as discussed above, there were significant indicia of direction and control, both under the contract (the agreements between the County and Hoosier and Paul), and in fact.
The County's principal argument with respect to direction and control in fact is that any direction and control exercised by the County over them "was solely in the context of the County's statutory role as the certifying agency, the placing agency, [and] the agency that administers the Medicaid waiver program and/or its general case management obligations." Thus, it argued, it did no more than to ensure that applicable laws, regulations and rules were complied with and that the resident of the adult family home was protected.
The County is thus in effect arguing that whatever direction and control it exercised was not a matter of it acting as an employer, but rather was merely a reflection of it acting as a certifying and regulating agency, complying with its legal responsibilities to certify and regulate an "adult family home" in which Susan was being provided care. The commission finds this argument unpersuasive, because it is so clear that the arrangement in which Susan was being cared for did not fall within the scope of what the statutes recognize an "adult family home" to be.
As noted above, it is a basic requirement of an Adult Family Home that it be a private residence which is the primary domicile of the care provider. Wis. Stat. § 50.01(1)(a)1. That is clearly a central and integral part of the "adult family home" idea. It contemplates bringing or placing an adult in need of care into an existing family situation, in that family's home, where the members of that family care for that adult The central importance in foster care programs of the care being provided in the caregiver's home, is also reflected in the fact that the Internal Revenue Code's exclusion of "qualified foster care payments" from income is limited to situations involving a foster care provider "caring for a qualified foster individual in the foster care provider's home". 26 U.S.C. § 131.
However, the condition that the care be provided in a private residence which was the primary domicile of the care providers was clearly never met in this case. Susan lived in, and was cared for in, her own residence. Hoosier and Paul had never lived there before they began providing services for Susan. Most significantly, during the entire time that they were providing services to Susan, they both continued to maintain residences elsewhere to which they returned when not providing services for Susan in her condo.
It is clear that the County understood, that serious questions were raised by the fact that the arrangement here was one in which the care was being provided in Susan's home, and not in the home of the caregivers. Zellner-Ehler's euphemistic description of the situation as an "unorthodox" one for an adult family home, belies a more serious concern, more frankly reflected in Zellner-Ehlers' letter of March 28, 2000 in which she describes the county's "primary concern . . . in the delivery of adult family home services under this type of arrangement, whereby both providers are not calling the residence their 'primary residence' ".
The County took a number of steps to try to create a basis for claiming that Susan's condo really was somehow Hoosier's and Paul's primary domicile. One was to require Hoosier and Paul to make certain payments which could be argued to make them renters of the property, thus supporting the notion that it was "their" residence. Another step was to include special provisions in the agreements between the County and Hoosier and Paul which purported to define the "adult family home" operated in Susan's condo, as their residence.
The commission does not find these steps to be determinative. The law governing establishment and change of domicile and residence does not turn on such things. "Residence" is the place where one actually lives or has his or her home, dwelling place or place of habitation, or abode; "domicile" means living in that locality with intent to make it a fixed and permanent home. State v. Corey J. G., 215 Wis.2d 395, 415, ¶ 39, 572 N.W.2d 845 (1998). Domicile is very much a matter of where one intends one's permanent home to be: it is
generally regarded as the place where a man has his fixed and permanent home or residence to which he intends to return whenever he is absent therefrom. It is not a residence for any special or temporary purpose but one intended to be permanent for an unlimited or indefinite period.
Estate of Daniels, 53 Wis.2d 611, 615, 193 N.W. 2d 847 (1972). The Court has also said:
To acquire a domicile of choice, a person must establish a dwelling place with the intention of making it his home; and having a home in one place, he can acquire a domicile of choice in another by giving up the first home and acquiring a new home in the second place. [citation omitted] The abandonment of a residence once established and the acquisition of a new one is largely a matter of intention.
Marathon Co. v. Milwaukee Co., 273 Wis. 541, 545-46, 79 N.W.2d 233 (1956).
Considering these principles, the evidence in the record here shows clearly that Susan's condo was never the "domicile" of Hoosier or Paul. Each of them always had their own, separate, domiciles. Hoosier had her own residence, a trailer in a trailer park. She testified that she never showed or claimed Susan's condo as her legal residence. Although Hoosier was told by the County at one point that she should arrange to have her mail sent to the condo, she never did, but instead continued to have it delivered to the trailer where she lived and which she considered her residence. Paul also had a separate residence -- indeed, she had a husband and children, and they all lived together there as a family, in their own home. In addition to the fact that Paul lived there with her family when she was not "on duty" at Susan's condo, she would actually go there and spend her time there during the hours of the day while Susan went to her job. None of the furnishings in the condo belonged to Paul or Hoosier. The only personal items either would have with them while staying there was the clothes they brought with them. There were only two beds in the condo; the one which was not used by Susan was shared by both Hoosier and Paul during the alternating weeks when they were staying there. According to Paul, there were occasions on which Susan's mother would bring guests over to visit Susan, and on those occasions the caregiver (Hoosier or Paul) might be "asked to leave." Susan's mother made it "perfectly clear" to Paul that she was just there to take care of Susan and that it was "Susan's house." Hoosier and Paul testified repeatedly that it was their understanding, both when the arrangement was proposed to them by the County, and when they were actually providing the services, that they were doing so in Susan's residence. The fact that they did not consider it to be "their" home, and considered their own homes to be elsewhere, is reflected in their testimony that they had inquired of the County whether it would be permissible for them to take Susan into their own homes (and were told they could not). Paul testified that in a meeting with Susan's brother and Cindy Zellner-Ehlers, they were told that the condo was not their residence. This evidence, and other elements of the testimony of Hoosier and Paul, made it very clear that neither of them ever considered Susan's condo to be their residence or home or domicile at all.
The commission does not consider the purported interest of Hoosier and Paul as "renters" of the property to be persuasive as a factor here. While the payment of $300/month that Hoosier and Paul were each required to make to Susan's brother was described by the County as "rent," it does not appear that either the County or Susan's family believed there was actually any separate tenancy right created by it. If this had been an actual rental tenancy, it would have had to be so pursuant to a lease (written or oral) between Hoosier and Paul on the one hand, and the guardian of the person and the estate of Susan, who held a life estate ownership interest in the property. Yet there was no evidence that he ever initially entered into any arrangement to "rent" the property to Hoosier or Paul. It is clear that the relationship, such as it was, was created by the County, and was confirmed only by agreements between the County and Hoosier and Paul. Yet the County was in no position to "rent" Susan's condo to Hoosier and Paul
Also, if there had been an actual, separate, rental tenancy here, Wis. Stat. Ch. 704 would have been applicable and, given the lack of a written lease, that chapter's provisions relative to "periodic tenants" would have governed. Under those provisions, Hoosier and Paul could have continued to live in the condo even after the termination of the agreement with Door County regarding the operation and certification of the Adult Family Home, unless and until the separate tenancy was terminated. However, there is no indication that this would have actually been allowed or tolerated by Susan's family. There was no evidence in the record that any separate action of any kind was taken by the person with legal control over the property (Susan's brother), sufficient under Chapter 704, to terminate Hoosier's and Paul's supposed tenancy interest in the condo: Susan's brother testified that he did not personally provide Hoosier and Paul with any sort of written or oral notification that their services were terminated. The only notice of any kind given to them came from the County (and it did not even say anything about ending the "rental" of the property or when it had to be vacated).
The fact that Door County purported to certify the arrangement as an "adult family home" can not change the fact that it clearly did not satisfy the definitional requirement that an "adult family home" be a residence where care is provided by caregivers whose primary domicile is that residence. The certification of this arrangement as an "adult family home" has no more significance to the question presented in this case (i.e., were Hoosier and Paul performing their services as employees), than does a provision in a written agreement which purports to declare that a person is an independent contractor rather than an employee. The declarations of a party do not necessarily determine the question; the actual facts and real nature of the relationship must be considered.
For all the foregoing reasons, the commission rejects the County's argument that the significant indicia of control exercised by the County should be seen merely as an exercise of regulatory authority and thus not considered relevant under Wis. Stat. § 108.02(12)(c)1. Those indicia of control are appropriately taken into account here, and given their extent, it must be concluded that the County failed to establish the requisite freedom from direction and control.
Independently established -- The second question presented under § 108.02(12)(c) is whether an individual's services were performed in an independently established trade, business or profession in which the individual is customarily engaged. The "independently established" condition is analyzed in light of five interrelated factors set forth in Keeler v. LIRC, 154 Wis. 2d 626 (Ct. of App. 1990):
1. Integration -- whether the services performed directly relate to the activities conducted by the company retaining those services.
2. Advertising or holding out -- whether the alleged employee advertises or holds out to the public or a certain class of customers the existence of its independent business.
3. Entrepreneurial risk -- whether the alleged employee has assumed the financial risk of the business undertaking.
4. Economic dependence -- whether the alleged employee is independent of the alleged employer, performs services and then moves on to perform similar services for another.
5. Proprietary interest -- whether the alleged employee owns various tools, equipment, or machinery necessary in performing the services involved, but also including whether the alleged employee has proprietary control, such as the ability to sell or give away some part of the business enterprise.
The Keeler factors are not to be mechanically applied. Rather, the weight and importance of each factor varies according to the specific facts of each case. The five factors should be applied in a manner consistent with the purpose of the statute -- "to effect unemployment compensation coverage for workers who are economically dependent on others in respect to their wage-earning status." Larson v. LIRC, 184 Wis.2d 378, 391 (Ct. App. 1994).
The services provided by Hoosier and Paul were completely integrated with the activities conducted by the County's Department of Community Program. There is no evidence that Hoosier and Paul engaged in anything in the nature of advertising or holding themselves out to the public as being engaged in an independent business of such care-giving. Hoosier and Paul assumed no entrepreneurial financial risk of the type contemplated by this standard in entering into this relationship. They also had no proprietary interest in either tools, equipment, or machinery necessary to perform the services, and absolutely no interest in the "business enterprise" as such which they would have been free to transfer to anyone else.
The only extent to which it could be argued that they satisfied any of the Keeler conditions was that they apparently performed somewhat similar care services in the home of an elderly couple during daytime hours when they were not occupied with their (alternating) duties at Susan's home. This, however, is no more significant as an indication of "economic independence" than would be the fact that an individual might hold two part-time jobs rather than one full-time job.
On balance, considering all of the Keeler factors, the commission concludes that it was not established that the services performed by Hoosier and Paul were performed in an independently established trade, business or profession in which they were customarily engaged within the meaning of Wis. Stat. § 108.02(12)(c)2.
The foregoing conclusions that Hoosier and Paul were not free from the County's control or direction over the performance of their services both under contract and in fact, and that Hoosier and Paul did not perform their services in an independently established trade, business or profession in which they customarily engaged, each independently require the conclusion that Hoosier and Paul were employees of the County within the meaning of Wis. Stat. § 108.02(12).
Was the County exempted from being considered an "employer" of Hoosier and Paul by virtue of Wis. Stat. § 108.02(13)(k) relating to "fiscal agents" --
The County argues that even if Hoosier and Paul are employees, it is nonetheless exempted from being considered their employer by virtue of the provisions of Wis. Stat. § 108.02(13)(k). At the times relevant herein, that provision stated:
108.02(13)(k) "Employer" does not include a County department or aging unit that serves as a fiscal agent or contracts with a fiscal intermediary to serve as a fiscal agent under s. 46.27(5)(i) or 47.035 as to any individual performing services for a person receiving long-term support services under s. 46.27(5)(b), 46.275, 46.277, 46.278, 46.495, 51.42, or 51.437 or personal assistance services under s. 47.02(6)(c). (3)
This provision is limited in its application to a County department or aging unit that serves as a fiscal agent (or contracts with a fiscal intermediary to serve as a fiscal agent) "under s. 46.27(5)(i) or 47.035." These two specific statutory references thus establish the scope of this provision.
The first, Wis. Stat. § 46.27(5)(i), provides:
46.27(5) County department or aging unit duties. The County department or aging unit selected to administer the program shall:
. . .
(i) In the instances in which an individual who is provided long-term community support services under par. (b) for which the individual receives direct funding, serve directly as a fiscal agent or contract with a fiscal intermediary to serve as a fiscal agent for that individual for the purposes of performing the responsibilities and protecting the interests of the individual under the unemployment insurance law. The County department or aging unit may elect to act as a fiscal agent or contract with a fiscal intermediary to serve as a fiscal agent for an individual who is provided long-term support services under s. 46.275, 46.277, 46.278, 46.2785, 46.495, 51.42, or 51.437. The fiscal agent under this paragraph is responsible for remitting any federal unemployment compensation taxes or state unemployment insurance contributions owed by the individual, including any interest and penalties which are owed by the individual; for serving as the representative of the individual in any investigation, meeting, hearing or appeal involving ch. 108 or the federal unemployment tax act (26 USC 3301 to 3311) in which the individual is a party; and for receiving, reviewing, completing and returning all forms, reports and other documents required under ch. 108 or the federal unemployment tax act on behalf of the individual. An individual may make an informed, knowing and voluntary election to waive the right to a fiscal agent. The waiver may be as to all or any portion of the fiscal agent's responsibilities. The waiver may be rescinded in whole or in part at any time.
This provision has a mandatory element and a permissive element. It effectively provides that the County department or aging unit "shall" serve directly as a fiscal agent (or contract with a fiscal intermediary to serve as a fiscal agent) in cases in which an individual is provided long-term community support services under § 46.27(5)(b) for which the individual receives direct funding. It then provides that the County department or aging unit "may" elect to act as a fiscal agent or contract with a fiscal intermediary to serve as a fiscal agent for an individual who is provided long-term support services under s. 46.275, 46.277, 46.278, 46.2785, 46.495, 51.42, or 51.437.
The second specific statutory reference in § 108.02(13)(k) for determining whether the County department or aging unit is serving as such a "fiscal agent," Wis. Stat. § 47.035, provides:
47.035 Fiscal agents for persons with disabilities. (1) Except as authorized in sub. (2) if an individual receives direct funding for personal assistance services that are provided to the individual under s. 47.02(6)(c), and the services are provided through a County department of human services or social services or an aging unit, the County department or aging unit through which the services are provided shall serve directly as a fiscal agent or contract with a fiscal intermediary to serve as a fiscal agent for that individual for the purposes of performing the responsibilities and protecting the interests of the individual under the unemployment insurance law. The fiscal agent under this subsection is responsible for remitting any federal unemployment compensation taxes or state unemployment insurance contributions owed by the individual, including any interest and penalties which are owed by the individual; for serving as the representative of the individual in any investigation, meeting, hearing or appeal involving ch. 108 or the federal unemployment tax act (26 USC 3301 to 3311) in which the individual is a party; and for receiving, reviewing, completing and returning all forms, reports and other documents required under ch. 108 or the federal unemployment tax act on behalf of the individual.
(2) An individual may make an informed, knowing and voluntary election to waive the right to a fiscal agent under sub. (1). The waiver may be as to all or any portion of the fiscal agent's responsibilities. The waiver may be rescinded in whole or in part at any time.
This creates only a single, mandatory requirement: that in the cases described, in which an individual receives direct assistance for personal assistive services, the County department or aging unit "shall" act as a fiscal agent (or contract with a fiscal intermediary to serve as a fiscal agent).
In summary, the effect of these provisions is that a County:
1) shall, under § 46.27(5)(i), act as a fiscal agent for an individual provided services under § 46.27(5)(b) who receives "direct funding";
2) may, under § 46.27(5)(i), act as a fiscal agent for an individual provided services under § § 47.275, 46.277, 46.278, 46.2785. 46.495, 51.42, 51.437; and
3) shall, under § 47.035, act as a fiscal agent for an individual provided services under § 47.02(6)(c) who receives "direct funding"
The administrative law judge found that although the County was a "County department" and Susan did receive long-term support services under Wis. Stat. § 51.42, still § 108.02(13)(k) did not apply, for two reasons: first, that Susan did not receive direct funding, and second, that there was no evidence that the County department had elected to serve as her fiscal agent.
The County's argument in response to this, is as follows:
The conclusion that "there is no evidence that Door County has elected to serve as fiscal agent for Susan" presumes Door County had a duty to do so. However, Sec. 46.27(5)(i), Wis. Stats., also provides: "An individual may make an informed, knowing and voluntary election to waive the right to a fiscal agent." It would appear it is not Door County's obligation to prove an election to serve as fiscal agent; rather the recipient of funding has an affirmative duty to provide an "informed, knowing and voluntary election to waive the right." In this case there is no evidence that Susan made such a waiver. Consequently, by virtue of Sec. 108.02(13)(k) Wis. Stats., Door County cannot be considered Claimants' employer.
It must initially be noted that this argument does not challenge the first point made by the administrative law judge, which is that Susan did not receive "direct funding." As discussed above, the record also makes it clear that Susan was not receiving direct funding. The BIW funds that paid for her care were applied for by the County, went directly to the County, and had to be disbursed by the County to pay for care for Susan. She had no personal claim to the money and no right to receive it directly.
Because Susan was not receiving "direct funding", the only possible fiscal agency arrangement here would be the one allowed for in § 46.27(5) where such an arrangement is optional for the County -- where, in the language of that section, "[t]he County department or aging unit may elect to act as a fiscal agent."
The County's argument that no election is necessary, and that instead it is necessary to find that the individual waived having the County as a fiscal agent, is wholly unpersuasive. The reason there is a provision in § 46.27(5) relating to an individual "waiving" a "right" to have a fiscal agent, is that the section includes some circumstances in which there is a mandatory requirement placed on the County to act as a fiscal agent. It is only in such cases, that the individual can be said to have a "right" to have a fiscal agent. In the other cases, because the statute expressly provides that the County may "elect" to act as a fiscal agent, it cannot be said that the individual has a "right" to have a fiscal agent, and therefore there is no right for them to waive.
As noted above, the situations in which a County is required to act as a fiscal agent, and in which there is no need for an "election" by the County but there is a need for a waiver by the individual, are situations in which the individual is receiving "direct funding". This is not such a situation. Because this is instead a situation in which the individual is not receiving direct funding, and in which the County "may" act as a fiscal agent, there would need to be an "election" by it to do so. There was no such election; the County was not acting as a "fiscal agent"
In any event, as the Department argues in its brief, the whole fiscal agent issue is intended to apply in situations in which services are being provided "for" the person being cared for, such that that person is themselves the employer. The fiscal agent provisions allow counties in such cases to relieve such small, individual employers (who are often subject to disabilities) from the burdens of compliance with the requirements of the UC Act. A County serving as a fiscal agent in such cases assumes all of the administrative responsibilities of dealing with the department in connection with UC matters, but it is relieved from the legal status of being the "employer" of the persons providing the services. This is simply not a relevant situation here, where considering the evidence the conclusion appropriately arrived at is that the services are being provided for the County and the County itself is the employer in the first instance.
For all of the foregoing reasons, the commission therefore finds that Vicki Hoosier and Cheryl Paul performed services for the employer as defined "employees", within the meaning of Wis. Stat. § 108.02(12) of the statutes, during the time period at issue, January 1, 2001 through May, 2003.
The Findings of Fact and Conclusions of Law of the administrative law judge are modified to conform with the foregoing and, as modified, the decision of the administrative law judge is affirmed. Accordingly, the County of Door is liable to include Vicki Hoosier and Cheryl Paul in its defined payroll for the period at issue.
Dated and mailed March 28, 2007
doorcou . srr : 110 : EE 411 ER 460
/s/ James T. Flynn, Chairman
/s/ Robert Glaser, Commissioner
NOTE: The commission has issued its own findings and conclusions in order to more fully set forth its reasons for arriving at the same result as the administrative law judge.
Attorney Michael J. Mathis, Bureau of Legal Affairs, DWD UI Div
Attorney Jeffrey R. Wisnicky, Asst. Corporation Counsel, Door County
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(1)( Back ) This is the version of this provision as it existed at the times relevant herein (the period from January 1, 2001 through May, 2003). It was subsequently amended to refer to additional newly-created subsections.
(2)( Back ) Hoosier and Paul were advised by Door County that they did not need to report the $2,600/month it paid them as "income" for income tax purposes. This advice was apparently based on a provision of the Internal Revenue Code, 26 U.S.C. § 131, which states that gross income does not include amounts received by a foster care provider as "qualified foster care payments", which are defined as payments made by a State or political subdivision pursuant to a foster care program, to a foster care provider "for caring for a qualified foster individual in the foster care provider's home".
Assuming for the sake of argument only that sums excludable from "income" under this provision could somehow be considered not to be "pay" for purposes of determining whether an individual was performing services "in an employment" within the meaning of §§ 108.02(12)(a) and (15), this would make no difference here, because it does not appear that the sums here were entitled to the exclusion provided for under 26 U.S.C. § 131. This is because, as is discussed at more length below, infra at p. 10, the services here were not provided in the foster care provider's home, but rather in the home of the person being cared for.
(3)( Back ) § 108.02(13)(k) was recently amended to change some statutory references. This is the version of this provision as it existed at the times relevant herein.