JOHN E ZIMMER, Respondent

NORTHERN BRIDGES LONG
TERM CARE DISTRICT, Petitioner

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.

The decision of the administrative law judge is affirmed. Accordingly, the wages paid to the claimant by Northern Bridges Long Term Care District shall be included in the department's computation of the claimant's base period wages for computing potential benefit eligibility.

Dated and Mailed August 12, 2011

 BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner

A two-step analysis is used to determine whether an individual is an employee. 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 for pay. Wis. Stat. § 108.02 (12)(a). In this case, the claimant provided services as an adult family home provider for which the petitioner paid him, such as making meals for the petitioner's member (JN), taking him to doctors' appointments, taking him out for social and recreational activities, and providing him with opportunities for social interaction. Accordingly, a presumption therefore arises that such services were performed as an employee. See, Eichman v. WTCS Foundation, UI Hearing No. 06003528JV (LIRC Jan. 18, 2007). The burden then shifts to the petitioner to establish that the claimant is excepted from employee status by some statutory provision.

Wis. Stat. § 108.02(12)(c) provides:

Paragraph (a) does 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 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.

Direction and Control

The petitioner asserts that there is no communication with the adult family home operator about how services are performed unless care management is concerned about the health or safety of a member. However, the claimant testified, and the ALJ concluded, that there were multiple instances of the exercise of direction and control of the claimant by the petitioner's staff members. The commission has reviewed the record and finds no reason to disturb the ALJ's factual findings or credibility assessments.

After an incident reported by the claimant, a member of the petitioner's staff counseled the claimant and advised him of a better method of dealing with JN's hitting behavior. In addition, regular meetings were held thereafter in which one of the petitioner's staff, JN, JN's guardian, and the claimant met to assess how

JN's behavioral issues were being handled. A member of the petitioner's staff advised the claimant not to respond to JN at night, and another staff member advised the claimant that he should meet with a dietician about JN's diet, and that JN should not have a cranberry supplement with his medication because it upset his stomach.

Although the petitioner may argue that most of these instances of direction and control related to the safety and health of JN, and the petitioner was simply assuring that JN was receiving proper care, the commission finds that these actions on the part of petitioner's staff were repeated and substantial enough to constitute the exercise of control and direction over the claimant's performance of his services. The petitioner has not met its burden to establish that the claimant performed his services free from the petitioner's control or direction.

Independently established trade, business, or profession

This condition is properly analyzed in light of the 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. i.e., "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). See also, Ristau v. Fox Valley Symphony Orchestra Assoc., Inc., UI Hearing No. 06401057AP (LIRC Aug. 23, 2006).

Integration - As noted by the ALJ, the services provided by the claimant were integrated into the family care management activities of the petitioner. This factor supports the conclusion that the claimant performed his services for the petitioner as an employee.

Advertising - The claimant did not advertise his services or hold himself out to the public as an adult family home provider. During the applicable time period, he performed services as an adult family home provider for the petitioner only, in JN's home. This supports the conclusion that the claimant performed his services for the petitioner as an employee.

Entrepreneurial risk - It could be argued that the claimant's purchase of a house, potentially to be used as an adult family home, was a significant and potentially risky investment on his part. However, he rented the house out while he lived with JN, and after he was discharged from his position performing services for JN, he moved into the house. Accordingly, the commission does not find this purchase to have been the kind of entrepreneurial risk of a business undertaking that is contemplated by this condition.

The claimant purchased a $300 commode for JN, but retrieved it from JN's house after he was discharged. He also purchased other items for JN with his own money, including clothing and a protective foam cover for the railings of JN's bed. He did not know how much money he spent, and these were expenditures for JN that the claimant chose to make, not the kind of investments in a business enterprise that are customarily associated with entrepreneurial risk. As noted by the ALJ, the claimant incurred little financial risk, supporting the conclusion that the claimant performed his services for the petitioner as an employee.

Economic dependence - The claimant performed services as an adult family home provider during the applicable time period only for the petitioner, and his certification for that work specified the house owned by JN. The commission has held that this factor refers to whether an individual's purported business enterprise can survive if the relationship with the putative employer ceases to exist. See, e.g., Larson, cited previously; Ristau v. Fox Valley Symphony Orchestra Association, Inc., cited previously. In this case, if the claimant's relationship with the petitioner, as an adult family home provider, ceased to exist, he would not be able to be an adult family home provider elsewhere, unless he was able to obtain certification/licensing for his own home to be used as an adult family home. In addition, although the claimant also performed other services for JN, he did so as a statutory employee, and not as an independent contractor. Therefore, as an adult family home provider, the claimant was economically dependent upon his relationship with the petitioner, indicative of status as an employee.

Proprietary interest - The claimant did not own anything of value that was necessary to perform services as an adult family home provider, and he had no ability to transfer some part of a business enterprise. See Lopez v. County of Richland, UI Hearing No. 09003995MD (Jan. 15, 2010). This supports the conclusion that the claimant performed his services for the petitioner as an employee.

Therefore, the petitioner has not established that the claimant performed his services for the petitioner in an independently established trade, business or profession in which he was customarily engaged.

Accordingly, the petitioner has not established that the services the claimant performed for it during the relevant time period were performed as an independent contractor, and not as an employee. The claimant performed services for the petitioner as an employee, and the amounts he earned performing these services are required to be included in the computation of his benefit entitlement.

zimmej3 : 120 : 1 : EE 411

cc: Attorney Mark Hazelbaker

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