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


TIME MEDICAL CONSULTANTS, Employer

UNEMPLOYMENT INSURANCE CONTRIBUTION LIABILITY DECISION
Account No. 658418, Hearing No. S9700009MW


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, Time Medical Consultants, Inc., Account No. 658418, is not liable for unemployment insurance contributions based on services provided by Christopher Nagy and Timothy Hart.

Dated and mailed June 30, 1998
timemed.ssd : 135 : 1   EE 410

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner


MEMORANDUM OPINION

In its petition for commission review, the department challenges several of the ALJ's findings reached under Wis. Stat. § 108.02(12)(b)2a through h. It is the respondent's position however that the ALJ correctly applied these statutory factors and conditions to the facts and circumstances of the case.

The first challenge concerns Wis. Stat. § 108.02(12)(b)2b. This condition inquires whether the individual operates under contracts to perform specific services for specific amounts of money and under which the individual controls the means and methods of performing the services. The department concedes that while the doctors operated under contract to perform specific services for specific amounts of money, they did not totally control the means and method of performing their services. The department contends that there was no control over the ultimate product, the final independent medical examination (IME) report. The commission disagrees. The respondent proofread the reports for grammatical errors and also ensured that the reports were complete and that the conclusions were adequately supported. This form of quality control does not indicate "total control" over the doctors' performance of services. The manner in which the reports were prepared was solely within the doctors' discretion exercised according to each doctor's professional judgment. Furthermore, the reports were based upon their performance of their examinations which they controlled the means and methods of performing. While the commission concedes involvement by the respondent regarding the final medical report, these reports were sent to the physicians for final review and if an insurance company or client was not satisfied with the medical report, its concerns were addressed directly by the physicians. The commission believes that the respondent established that these doctors met the condition found in Wis. Stat. § 108.02(12)(b)2b.

The condition found in Wis. Stat. § 108.02(12)(b)2c, is whether the individual incurs the man expenses related to the services that he or she performs under contract. The department contends that the main expense in performing these services was the rental of physical facilities in which the physicians performed their examinations. The department correctly notes that these expenses were borne by the respondent. The department however notes that medical malpractice insurance was relatively inexpensive because it "only dealt with liability with harming a patient in manipulating various body parts to determine range of motion and the like." The commission however has reviewed the synopsis of the record and finds no evidence to support a conclusion that the medical malpractice insurance maintained by these doctors was relatively inexpensive. Also, Dr. Hart's expenses in 1996 were approximately $4,300.00 for travel and $4,700.00 for office related expenses. The commission believes that these too were substantial and main expenses incurred. Additionally, both physicians had to invest in computers, computer programs, telephones, telephone lines, office supplies, furniture and fax machines for use in the connection with the performance of their services. Although the relative cost of these items is not clear from the record, the commission is satisfied that the physicians incurred sufficient expenses in the maintenance of their office equipment, supplies, travel and insurance, so as to constitute the main expenses related to their services under contract within the meaning of Wis. Stat. § 108.02(12)(b)2c.

The next finding challenged by the department concerns Wis. Stat. § 108.02(12)(b)2f. This condition inquires whether the individual may realize a profit or suffer a loss under contracts to perform services. The department contends that there may have been some speculative possibility of profit or loss but most of the expenses were not incurred unless there was an examination performed. The department notes that in almost all cases, the individuals received payment for those services and that payment greatly exceeded any expenses which may have been incurred. However, under the terms of the independent contractor agreement, if the respondent did not get paid, the physicians did not get paid. The department contends that this agreement is no different than an employe working for any other employer in that each employe runs the risk of not getting paid for services performed. Certainly the physicians often realized a profit but under the terms of the agreement, they did not receive compensation if a client did not pay the respondent. This contractual relationship is much different than that of an employe at will relationship which the department cites to. The doctors contracted for this arrangement and consequently may realize a profit or suffer a loss under Wis. Stat. § 108.01(12)(b)2f under the terms of the agreement.

The final finding challenged by the department falls under Wis. Stat. § 108.02(12)(b)2h which inquires whether the success or failure of the individual's business depends on the relationship of business receipts to expenditures. The department contends that the facts show that the success or failure of the physicians' performance of services did not depend upon the relationship of receipts to expenditures. The department contends that the "receipts so greatly exceeded expenditures that there was no realistic possibility of expenditures exceeding receipts." The department argues that the only possible way business expenditures could exceed receipts would be if the physicians would not be paid for an examination. However, this was a possibility since the physicians understood that they would not get paid if the client did not pay the respondent. Moreover, Dr. Hart testified that he felt the travel costs and expenses would exceed what he would realize as a profit on the evaluation. Thus, the commission is satisfied by the evidence shown that the condition found in Wis. Stat. § 108.02(12)(b)2h was also met.

The commission believes that under the new law, the respondent produced sufficient evidence that at least six of the eight conditions found in Wis. Stat. § 108.02(12)(b)2a through h have been met. Consequently, the commission affirms the appeal tribunal decision by adopting its findings and conclusions as its own.

cc: ATTORNEY PETER ZEEH
ENFORCEMENTS SECTION

ATTORNEY JOHN VITEK
BECK CHAET MOLONY & BAMBERGER

ATTORNEY KATHERINE WILLIAMS
BECK CHAET MOLONY & BAMBERGER


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