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


DANIEL HOCHSTETLER, Employer

UNEMPLOYMENT INSURANCE CONTRIBUTION LIABILITY DECISION
Account No. 548392, Hearing Nos. S9700147LX, S9700230LX, S9700349LX, S9800086LX


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued four decisions in this matter. A timely petition for review was filed as to all four decisions.

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 decisions of the ALJ, and it adopts the findings and conclusion in those decisions as its own.

DECISION

The decisions of the administrative law judge in Hearing Nos. S9700147LX, S9700230LX, S9700349LX, and S9800086LX, are affirmed. Accordingly, the employer is obligated to pay unemployment compensation contributions based on wages paid to his employes for the calendar quarters at issue. This matter is remanded for a more accurate determination of wages paid by the employer for the calendar quarters at issue.

Dated and mailed May 28, 1999
hochsda.ssd : 110 : ER 450  PC 749

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

James A. Rutkowski, Commissioner


MEMORANDUM OPINION

The employer involved in this case, Daniel Hochstetler, operated a sawmill. This case concerns his liability for unemployment compensation tax contributions for person who worked for him during certain calendar quarters.

There are no significant factual issues. Hochstetler concedes that in the calendar quarters at issue he had persons working for him who were his employes, and that he made payments to them which were payroll within the meaning of the Unemployment Compensation Act.

Hochstetler is asserting that he should be exempted from participation in the UC system because of his religious beliefs. Hochstetler is a member of the Old Order Amish, a Christian religion dating to the early 1600's, whose religious convictions include a belief that its members should not participate in insurance systems. It is one of the Articles of Faith of the Old Order Amish, that its members should provide help directly to others when they are in need, and they object to and do not wish to participate in formal systems of insurance.

Hochstetler does not claim that the Unemployment Compensation Act contains any provisions allowing an exemption such as the one he seeks, and it is very clear that there are no such provisions in the statutory language. (1)

It is clear that the sole basis for the exemption sought in this case is a constitutional one, resting on the guarantee of the right of free exercise of religion contained in the first amendment to the U.S. Constitution and Article 1 § 18 of the Wisconsin Constitution. Hochstetler is in effect arguing, that the Unemployment Compensation Act is unconstitutional insofar as it requires his participation as an employer, because it interferes with his free exercise of his religion.

Thus, the only way that the commission could arrive at the result Hochstetler seeks, would be to declare that the Unemployment Compensation Act is unconstitutional in part. However, it is well-established that administrative agencies do not have the legal authority to determine the constitutionality of legislative enactments, Wendlandt v. Industrial Comm., 256 Wis. 62, 67, 39 N.W.2d 854 (1949), and they may not declare state laws unconstitutional, Warshafsky v. The Journal Co., 63 Wis.2d 130, 147, 216 N.W.2d 197 (1974). Determinations as to the constitutionality of statutes are exclusively vested in the courts. Williams v. Madison, 15 Wis.2d 430, 113 N.W.2d 395 (1962).

While there are circumstances in which administrative agencies do have authority to deal with constitutional questions, see Omernick v. DNR, 100 Wis.2d 234, 301 N.W.2d 437 (1981), these are limited to situations in which the administrative agency already has the authority to change or invalidate the requirement that allegedly has an unconstitutional effect. (2) This is not such a case. LIRC has no power to change the provisions of the UC Act in terms of its coverage.

Given the undisputed facts, the statute requires the result in this case. The only basis for declining to do what the statute requires, would be to declare that the statute is constitutionally invalid. LIRC does not have the authority to do this. Therefore, it must affirm the decision of the administrative law judge.

cc: Attorney Jorge Fuentes


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Footnotes:

(1)( Back ) The notable absence of any exemption of this type in the Unemployment Compensation Act stands in contrast to the situation of the Wisconsin Worker's Compensation Act, which was amended in 1995 to add provisions allowing for an exemption from coverage, under certain circumstances and in certain situations, for members of religious groups which are conscientiously opposed to accepting the benefits of any insurance system. See, Wis. Stat. §§ 102.01 (2)(eg), 102.07(4m), (5)(d), 102.28 (3). The federal Social Security Act was also amended in 1988 to create an exemption from participation in the Social Security system for employers and their employees where both are members of religious faiths opposed to participation in such a system. See, 26 U.S.C. § 3127.

(2)( Back ) In Omernick, the Wisconsin Supreme Court noted the general rule that administrative agencies could not determine the constitutionality of legislative enactments, but the court observed that "constitutional questions may arise under other circumstances where an administrative agency does have authority to deal with them". 100 Wis. 2d at 247. However, the case which the court cited as an example of these circumstances, Nodell Inv. Corp. v. Glendale, 78 Wis.2d 416, 254 N.W.2d 310 (1977), illustrates the limited nature of those circumstances. That case concerned a claim that certain zoning restrictions imposed on property by a local plan commission violated the constitutional guarantees of equal protection of the laws and just compensation for private property taken for public use. The question of administrative agency authority concerned the zoning appeals board, to which the plan commission's restrictions could have been (but were not) appealed. The argument was made that there was a failure to exhaust remedies because there was no appeal to the zoning appeals board, and the response to this was, that the zoning appeals board, an administrative agency, could not have addressed the constitutional issues. The court rejected this, noting that in the circumstances of that case, the zoning appeals board would have had the power to invalidate the conditions imposed by the plan commission and to afford relief to the property owners without invalidating the ordinance itself. 78 Wis.2d at 426.