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

THOMAS E PRISSEL, Employer

UNEMPLOYMENT INSURANCE CONTRIBUTION LIABILITY DECISION
Account No. 624264, Hearing No. S9600154EC

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, the appellant is to report compensation received by the individuals in question to the department.

Dated and mailed February 24, 1998
prissth.ssd : 105 : 3 EE 410  EE 412  EE 413

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The appellant's representative appeals the findings that Mr. Gruhlke was an employe of the appellant under both the pre-1996 independent contractor law and the post-1995 law. The commission has affirmed the appeal tribunal decision nonetheless, because it fully agrees with the administrative law judge that in fact Gruhlke was an employe under both tests. The first element of the pre-1996 test is freedom from direction or control. By the appellant's own testimony, Gruhlke does not meet this criterion. The appellant conceded that he had the right to "say what way things should be done." In addition, Gruhlke could not subcontract the work himself without the appellant's consent. The appellant also conceded that he criticized the individuals' work occasionally and would tell them if they were putting something in wrong. With regard to Gruhlke specifically, finally, the appellant conceded that he had had to give him some instructions on what and how to do things. Based upon these factors, it is evident that Gruhlke does not meet the freedom from direction and control portion of the independent contractor test.

The record also indicates that Gruhlke does not meet the performance of services in an independently established trade criterion. With regard to the first factor looked at, integration, his services are obviously fully integrated into the appellant's business. With regard to the second factor, advertising, it is true that Gruhlke distributes business cards, but he still gives the appellant preference over other jobs. Neither Gruhlke nor any of the other individuals performing services for the appellant incurred financial risk; the court and commission have treated this factor as requiring some investment of risk capital or, at the least, some risk of loss, and neither is present in this case. Finally, neither Gruhlke nor the other individuals performing services for the appellant had a proprietary interest in a business they could dispose of as they wished; rather, they had only their personal services to provide. Based upon these factors, the administrative law judge correctly concluded that none of the individuals meet the independently established trade criterion of Wis. Stat. § 108.02(12)(b)2.

Gruhlke also does not satisfy the necessary six of the eight independent contractor criteria listed in the post-1995 Wis. Stat. § 108.02(12)(b)2. First, the record does not indicate that Gruhlke operates under contracts to perform specific services for specific amounts of money under which Gruhlke controls the means and method of performing the services. Rather, he bills the appellant by the month for his work. Second, the record does not establish that Gruhlke incurs the main expenses related to the services he performs for the appellant. Third, Gruhlke's compensation is not on a commission or per job or competitive bid basis, but appears rather to be based on the number of hours he worked for the appellant. Fourth, Gruhlke does not realize profit or suffer loss based upon contracts to perform services. Finally, Gruhlke's success or failure does not depend on a relationship of business receipts to expenditures. For these reasons, the commission believes the administrative law judge also properly concluded that Gruhlke was not an independent contractor under the post-1995 law.

cc: LAVONNE KLEVGAARD
ACCOUNTANT

ATTORNEY JAMES W FLORY
MISFELDT STARK RICHIE & WICKSTROM

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