STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

BETH A DELLABELLA, Employee

WHISPERING CREEK FARMS
ROBERT & MARILYN LENTZ, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 08401921AP


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 agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.

DECISION

The decision of the administrative law judge is affirmed. Accordingly, the wages paid to the claimant by the employer shall be reported to the department as they are earned.

Dated and mailed November 17, 2008
dellabe . usd : 110 : EE 410 ET 483.01

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

MEMORANDUM OPINION

This case is concerned with the issue of whether Beth Dellabella is required to report amounts she receives from Marilyn and Robert Lentz (operating as Whispering Creek Farms) as wages when she files weekly claims for unemployment insurance benefits.

Individuals like Ms. Dellabella who are receiving unemployment insurance benefits are required to file weekly benefit claims in which they must, among other things, report the amount of any wages they have earned in the week for which they are claiming. This is necessary because an individual's entitlement to unemployment insurance benefits for a week is reduced or eliminated if they earn wages in that week. However, amounts an individual receives for services provided by them as an independent contractor do not need to be reported by them as wages. Therefore, in any case in which an unemployment insurance benefit claimant is receiving money for services they provide during a week for which they are also claiming benefits, it is necessary to determine if they are providing those services as an employee or as an independent contractor, so that they can be issued a determination informing them whether or not they are obliged to report the earnings when making their weekly claims.

The department determined, and the administrative law judge agreed, that for purposes of resolving the question of whether she has to report the amounts she receives from the Lentz's as wages, Dellabella provides services to the Lentz's as an "employee", as that term is expressly defined in Wis. Stat. § 108.02(12). The effect of the decision is that Dellabella must therefore report the amounts she is receiving as wages when she makes her weekly benefit claims.

The Lentz's have appealed. Their appeal is based on a different definition in the UI Act, the definition of the term "employment" contained in Wis. Stat. § 108.02(15). They argue that Dellabella falls within § 108.02(15)(k)(20)a., which provides:

§ 108.02 Definitions. As used in this chapter: ...

(15 ) Employment....

(k ) "Employment" as applied to work for a given employer other than a government unit or nonprofit organization, except as the employer elects otherwise with the department's approval, does not include service:. . .

20. Provided to a recipient of medical assistance under ch. 49 by an individual who is not an employee of a home health agency, if the service is:

a. Private duty nursing service or part-time intermittent care authorized under s. 49.46 (2) (b) 6. g., for which medical assistance reimbursement is available as a covered service, provided by an individual who is certified by the department of health services under s. 49.45 (2) (a) 11. as a nurse in independent practice or as an independent nurse practitioner; . . .

However, this provision is not relevant to the issue presented by this case. As noted above, the only issue presented by this case is whether the claimant performs her services as an "employee" -- and the only purpose for which that issue is being decided, is determining whether she is required to report her earnings each week when she files her UI benefit claims. The provisions of the UI Act defining the word "employment", including the provision relied on by the Lentz's in their appeal, are separate from the provisions defining the word "employee". Those definitions have a variety of different purposes and different effects, bearing on different matters such as an individual claimant's benefit entitlement, what UI employer account(s) may be "charged" with liability for any benefits paid, and whether UI contributions (taxes) may be due on amounts paid to an individual.

For the purposes of the narrow issue presented by this case, which is whether Dellabella is required to report the amounts she receives from the Lentz's as "wages" when she files her weekly benefit claims, the Lentz's argument that Dellabella's services are provided in "employment" as defined in § 108.02(15), is beside the point. What matters, given the issue presented, is whether Dellabella provides her services as an "employee" as that term is defined in § 108.02(12). The commission affirms because it concludes that the administrative law judge properly found that she did.

In closing, the commission wishes to note that the determination in this case that Dellabella provides services to the Lentz's as an "employee" as defined in § 108.02(12), for purposes of resolving the question of whether she has to report the amounts she receives from the Lentz's as wages, does not actually have any effect on the Lentz's. It is not a determination that they will be "charged" with liability for any UI benefits paid to Dellabella. Indeed, it is clear that they will not be, because department records show that Dellabella's current benefit entitlement is based on earnings from services she provided in her "base period" for other employing units, for whom she worked before going to work for the Lentz's; it is those former employers whose UI accounts may be charged with liability for the benefits paid to Dellabella. In addition, the determination in this case that Dellabella provides services to the Lentz's as an "employee", is not a determination that the Lentz's must pay UI contributions (taxes) on the amounts they pay Dellabella. If a determination ever is made by the department that Dellabella is an employee of the Lentz's for the purposes of making them liable to pay UI taxes, it will be made in the form of a separate, new decision which the Lentz's will have the opportunity to appeal. Furthermore, if that occurs, the determination made in this case will not be binding, as a result of Wis. Stat. § 108.101(2) which provides in effect that a decision in a case concerning an individual benefit claim is not binding in any subsequent case concerning UI tax issues.



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uploaded 2008/12/29