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


GREGORY A QUINDEL, Employe

THE PAPER, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 98606460MW


An administrative law judge 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 administrative law judge. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The claimant worked for the employer, a newspaper business, for approximately one year as the president and publisher. His last day of work was on or about August 4, 1998 (week 32), when his employment was terminated by the major stockholder in the company.

The employer is a limited liability corporation (hereinafter "LLC") in which the claimant owned a 9.5% interest. The employer considered the claimant to be an employe of the business, but gave him some stock in the company in exchange for his time and effort in starting up the business. The claimant was paid a regular salary, from which taxes were withheld, and received a W-2 form for his earnings. Although he had the potential to share in any profits realized by the employer, he was not required to bear a share of the losses.

The issue to be decided is whether the claimant can be considered an "employe" for purposes of determining unemployment benefit eligibility.

The appeal tribunal concluded that the claimant performed no wage earning services for the employer and is not eligible for benefits. The appeal tribunal reasoned that a partner in a business is not considered an employe for UI purposes, and that partnerships and LLCs are treated the same under the law. Consequently, the appeal tribunal concluded that a member of an LLC is not an employe for UI purposes.

However, while the appeal tribunal's decision conforms with department policy, there is nothing in the law which dictates that LLC members cannot be considered employes for UI purposes. Further, there is a statutory presumption in favor of benefit eligibility. In recognition of these factors, the commission has held that members of an LLC are not automatically disqualified from eligibility based on services performed for the company and that determination of employe(r) status of a member of an LLC must be done on a case-by-case basis. Keith R. Bergen (LIRC, March 12, 1998); Hoelzer v. Green Fields Golf Center, LLC (LIRC, September 17, 1997).

In this case, the claimant owned only an insubstantial share in the company, amounting to less than 10% of the stock. The testimony of the claimant and of the employer's business manager indicates that the claimant was considered a paid employe of the business and was treated as such. The claimant testified that the employer was paying UI taxes on his earnings, and the employer's witness indicated that the employer has no objection to the payment of benefits to the claimant from its account. Given these factors, and considering the statutory presumption in favor of eligibility and the lack of a statutory provision requiring ineligibility, the commission concludes that the claimant should be considered an employe of the employer for UI purposes.

The commission, therefore, finds that the claimant performed services for the employer as an employe in an employment and that he is eligible for benefits based on those services, within the meaning of Wis. Stat. § 108.02(12) and Wis. Stat. § 108.02(13).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the claimant is eligible for benefits based upon his services for the employer, provided he is otherwise qualified.

Dated and mailed March 18, 1999
quindgr.urr : 164 : 1 : ER 465  ET 483.04

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner


NOTE: The commission did not confer with the administrative law judge regarding witness credibility and demeanor. The commission's reversal is not based upon a differing assessment of witness credibility, but is as a matter of law.


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