BEFORE THE
STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION

UNEMPLOYMENT INSURANCE CONTRIBUTION LIABILITY DECISION

In the matter of the contribution liability,
or status, under Chapter 108, of

MIDWEST SPEEDWAYS, INC., Employer                     Account No. 054693-3,             Hearing No. 7317, S

MIDWEST BLEACHERS, INC., Employer                      Account No. 079152-2,             Hearing No. 7318, S

MIDWEST RACING NEWS, INC., Employer                 Account No. 131161-9,             Hearing No. 7319, S

CRYSTAL RIDGE INC., Employer                                  Account No. 045648-5,             Hearing No. 7320, S


Pursuant to the timely petition for review filed in the above-captioned matter, the Commission has considered the petition and all relief requested. The Commission has reviewed the evidence and applicable law. The tape-recording of the hearing has been reviewed. The Commission finds that the Appeal Tribunal's findings of fact and conclusions of law are supported, and adopts such findings and conclusions as its own, except as herewith modified:

The following is added between the eighth paragraph and the final paragraph of the Appeal Tribunal's FINDINGS OF FACT AND CONCLUSIONS OF LAW:

The employer corporations have also argued that the situation of the "common paymaster" corporation and the other three corporations in this case is like the situation of a temporary help agency and its client-businesses. The argument is, essentially, that if the corporations here involved cannot use a common paymaster to obtain a single taxable wage base, because the services are performed for separate employers, then the clients of temporary help agencies should be required to pay U.C. contributions based on the wages earned by individuals assigned to such clients by the temporary help agency.

There are a number of reasons for rejecting the corporations' comparison of their situation to that of a temporary help agency and its clients. A temporary help agency, being a single business entity, would have a single U.C. account. These four corporations, although inter-related, had separate U.C. accounts. Moreover, acceptance of their position would allow them to effectively terminate the coverage of three employers, contrary to 108.02 (13)(i), which gives the Department exclusive authority in that regard. Further, with respect to the alleged common paymaster corporation, there is no evidence that its primary business activity was the provision of temporary help to other businesses nor is there any evidence that it held itself out as available to provide temporary help workers to other, unrelated businesses. There was, in fact, testimony that the arrangement was not intended to generate a profit for the paymaster corporation.

On the income tax returns of the four individual corporations, wages are listed as the expenses of the particular corporation for which the services were performed; an individual performing services for all four corporations also gets four W-2's. In all these respects, the situation is different from that of a temporary help agency and its clients.

One of the purposes for operating the four separate corporations was to separate, and limit, liability for such things as personal injuries. Essentially, the corporations are saying that they should have the advantages of operating as separate business entities for certain purposes but should also have the advantages of being treated as a single employer for U.C. tax purposes. The Wisconsin legislature, however, has not, thus far, adopted the "common paymaster" concept as part of this state's unemployment compensation policy and the arrangement between these four corporations is clearly distinguishable from the relationship between a temporary help agency and its clients.

DECISION

The Appeal Tribunal Decision is modified to conform with the foregoing and, as modified, is affirmed. Accordingly, the named employers are liable for delinquent contributions and interest accrued in the amounts stated on the Initial Determinations in this matter, or are owed contributions paid in the amounts stated on such determinations.

Dated and mailed January 26, 1989
200 : CD4028   ER 460

/s/ Hugh C. Henderson, Chairman

/s/ Carl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner

MEMORANDUM OPINION

In their petition for Commission review, the named corporations correctly asserted that one of their arguments, comparing their situation to that of a temporary help agency and its clients, had been raised at the hearing but was not addressed in the Appeal Tribunal Decision. The Commission has carefully considered that argument and has modified the Appeal Tribunal Decision to expressly address such argument.

The petition before the Commission also asserts that the arrangement here in issue was motivated, in part, by administrative and personnel considerations. The Commission has no reason to disbelieve that;   however, such considerations do not alter the fact that separate corporations are separate business entities and, therefore, separate employers under the long-standing administrative application of the Wisconsin Unemployment Compensation Act.

It is also asserted, in the petition before the Commission, that the "paymaster corporation" in this case, Midwest Speedways, Inc., received from the other corporations substantial fees, allegedly amounting to as much as, or more than, the receipts of many employment agencies. This assertion was not made at the hearing and appears to be in conflict with testimony at the hearing to the effect that the arrangement "wasn't meant for Midwest Speedways to make money on."

Finally, the petition before the Commission asserts that the Administrative Law Judge who conducted the hearing failed to provide a fair and unbiased hearing and issued a "slanted" decision.  Because of those allegations, the entire tape-recording of the hearing has been reviewed.  The Commission finds no support for the allegations of bias, unfairness or slanted decision-making.  The Administrative law Judge was thorough, courteous and tolerated a number of statements by the corporations' representative which did not constitute questions and answers.  The mere fact that a decision is adverse to a party certainly does not indicate bias on the part of a decision-maker.  As discussed above, the Administrative law Judge in this case did fail to expressly address, in his decision, an argument presented by the corporations;  the Commission is satisfied that this was inadvertent, rather than the result of any bias.  In any event, the argument has been considered by the Commission and is not persuasive, for the reasons discussed in the Commission's modification of the Appeal Tribunal Decision.

cc:
Jorge Fuentes, Attorney
Gene R. Dvorak, S.C.


[Ed. Note:   Subsequent to this decision, the Wisconsin Legislature created Wis. Stat. § 108.065(2), which adopts the "common paymaster" concept as reflected in 26 U.S.C. § 3306(p) in the Federal Unemployment Tax Act.   1993 Wisconsin Act 373, sec. 60., eff. May 3, 1994.]

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