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

CAROL A JAEGER, Employee

PRE-PAID LEGAL SERVICES INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 09006981MD


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:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

In June 2009, the claimant (Jaeger) entered into an agreement with the putative employer (Pre-Paid) to sell its legal expense plans in Wisconsin and Illinois.

The issue is whether amounts earned by Jaeger for performing services for Pre-Paid pursuant to this agreement constitute base period wages.

Since Pre-Paid required Jaeger to acquire a state insurance license in order to sell these plans, and the agencies regulating the insurance industry in Wisconsin and in Illinois issued Jaeger a license to sell these plans, it is a reasonable inference that the plans are considered regulated insurance products in those states.

Jaeger was paid for the services she performed for Pre-Paid solely on a commission basis.

Wisconsin Statutes § 108.02 states as follows, as relevant here:

108.02 Definitions. As used in this chapter:

(4) Base period. "Base period" means the period that is used to compute an employee's benefit rights under s. 108.06...

(4m) Base period wages. "Base period wages" means:

(a) All earnings for wage-earning service which are paid to an employee during his or her base period as a result of employment for an employer;...

(15) Employment.

(a) "Employment", subject to the other provisions of this subsection means any service, including service in interstate commerce, performed by an individual for pay....

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

...6. By an individual for a person as an insurance agent or an insurance solicitor, if all of the service performed as an insurance agent or solicitor by the individual for the person is performed for remuneration solely by way of commission....

Pursuant to Wis. Stat. § 108.02(4m), in order to be considered base period wages, earnings must be "paid to an employee during his or her base period as a result of employment for an employer..."

Here, the exception stated in Wis. Stat. § 108.02(15)k. specifically excludes from the definition of employment the types of services Jaeger performed for Pre-Paid, i.e., insurance sales services remunerated solely by way of commission. Consequently, the amounts earned by Jaeger for performing such services would not be considered base period wages. See, Roth v. World Financial Group, Inc., UI Hearing No. 07002934MD (LIRC Jan. 10, 2008).

Although the claimant performed services for the putative employer during the base period, these services were performed in excluded employment, and, consequently, the claimant's earnings for performing these services are not base period wages within the meaning of Wis. Stat. § 108.02(4m).

No overpayment was created as a result of this reversal of the ALJ's decision.(1)

DECISION

The decision of the administrative law judge is reversed. Accordingly, the amounts earned by the claimant during the base period for performing services for the putative employer are not base period wages.

Dated and mailed April 15, 2010
jaegeca . urr : 115 : 5 ET 483.07 UW 900

James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

NOTE: The commission did not confer with the administrative law judge before reversing her decision, because its reversal was not based upon a differing view as to the credibility of witnesses, but instead upon a differing interpretation of the relevant law.



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uploaded 2010/05/14


Footnotes:

(1)( Back ) The reason for this was explained by the department as follows: The employer reported wages in the 2nd and 3rd quarters of 2009. The claimant exhausted all benefits in week 13 of 2010. The system attempted to establish a new benefit year as of week 16 of 2010. Pre-Paid would fall within the base period timeline if the claimant had qualified for a new claim, but she has not.