STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)
SHIRLEY A NICKELL, Applicant
COUNTY KEWAUNEE OTHER, Employer
FIREMANS FUND INSURANCE OF WISCONSIN, Insurer
WORKER'S COMPENSATION DECISION
Claim No. 94064155
An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development (Department of Industry, Labor and Human Relations prior to July 1, 1996) 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 order in that decision as its own, except that it makes the following modifications:
1. Delete the sixteenth through twentieth paragraphs of the ALJ's Findings of Fact, and substitute:
"The main legal issue in this case is whether the relationship of employe and employer exists, and between which parties (the applicant and county or the applicant and Ms. Kostichka). This issue has two parts: is the applicant 'an employe' and, if so, who is her 'employer?'
"Section 102.07 (1), Stats., defines 'employe' to include any person in the service of the state or a municipality (1) under an express or implied contract of hire. More generally, sec. 102.07 (4), Stats., defines 'employe' to include every person in the service of another under a contract of hire, whether the contract is express or implied. However, 'domestic servants' are specifically excluded from the definition of 'employe' for persons in the service of another under sec. 102.07 (4)(b), Stats. No similar exclusion is found in sec. 102.07 (1), Stats., dealing with persons in the service of the state or municipalities.
"No one disputes that the applicant is performing service under a contract of hire. The question is whether she is in the service of the county or Ms. Kostichka. The county asserts, however, that regardless of how this question is answered, the applicant is a domestic servant and so excluded under sec. 102.07 (4)(b), Stats. However, the commission cannot agree.
"If the applicant's employer were Ms. Kostichka, then a persuasive argument might be made that the applicant was a 'domestic servant,' and not covered under the workers compensation law. On the other hand, if the applicant were employed by the county, that argument would be much less persuasive. Certainly, the applicant would not be the county's domestic servant, but rather an individual the county assigned to cleaning and shopping duties in other people's homes.
"The distinction is significant. A finding that a person who works for an employer doing 'domestic service' for third parties is a 'domestic servant,' might exclude whole classes of employes who work for businesses that provide housecleaning services, catering, or similar services. Courts in other states who have considered the issue have refused to apply similar 'domestic servant' exceptions in workers compensation cases where housecleaners are placed in homes by a referral service who employed the housecleaners. (2)
"Moreover, the 'domestic servant' exclusion under sec. 102.07 (4)(b), Stats., applies only to service with 'another,' the 'other' presumably not including service with the state or municipalities already dealt with in sec. 102.07 (1), Stats. (3) And, of course, the domestic servant exclusion is found only in sec. 102.07 (4), Stats., not in sec. 102.07 (1), Stats.
"Regardless of how this case is analyzed, then, the domestic servant exception would apply only if the applicant's 'employer' was Ms. Kostichka, and not the county. In short, the resolution of this case depends on the question: 'Who was the employer?'
"As the parties agree, and the Labor and Industry Review Commission (the commission) noted in Joyce Ambrose v. Harley Vandeveer Family Trust, WC claim no. 86-39393 (LIRC, February 28, 1989), this question is governed by Kress Packing Company v. Kottwitz, 61 Wis. 2d 175 (1973). According to the court in Kress, the primary test for determining the existence of an employer-employe relationship is whether the alleged employer has a right to control the details of the work; among the secondary tests are: (1) direct evidence of the exercise of the right of control, (2) method of payment of compensation, (3) furnishing of equipment or tools for the performance of the work, and (4) right to fire or terminate the employment relationship. Kress, at 61 Wis., 2d 182.
"In Ambrose, supra, a disabled individual received provided 'primary care' from her sister, and her sister was paid from a family trust at the direction of the disabled individual. When the caregiver sister was injured, she attempted to get workers compensation from the trustee of the family trust. The commission first determined that the caregiver sister was providing 'primary care' to the disabled individual, and was not a 'domestic servant.' Moreover, the disabled individual was able to manage her own personal affairs, she had hired her sister as caregiver, set her salary, directed the trust to pay her, and supervised the performance of her duties. The commission thus concluded the family trust and trustee operated only as manager and conservator of the trust funds, and that the disabled individual was the employer of her caregiver sister.
"This case is not so clear-cut. The record indicates that some eligible service recipients under the Community Options Program choose their own personal care workers, and then apply to the county for payment. In this case, Ms. Kostichka had chosen the applicant's predecessor, but when that woman left Ms. Kostichka simply asked the county for a referral. In addition, the applicant herself went to the county to find placement as a personal care worker, the county required her to be trained, the county placed her in assignments with many different eligible service recipients over a period of several years, and the county employs people to act as supervisors of personal care workers.
"Moreover, the applicant's rate of pay was set by the county, and she was paid, through fiscal intermediary Westen, from funds he received from the county. While it is true that the personal care workers are paid through a 'fiscal intermediary,' they are paid by a single check, with funds the fiscal intermediary receives from the county, regardless of the number of eligible service recipients to whom the worker provides services. Further, the county itself selected Mr. Westen to serve as fiscal intermediary for Ms. Kostichka and numerous other eligible individuals.
"On the other hand, of course, the applicant testified that the county instructed her to do whatever the eligible service recipients wanted her to do. Moreover, the county's witness testified that the county would not fire the personal care workers. In addition, the county did not provide equipment or tools to the applicant, though that would hardly be expected under this arrangement.
"Further, the legislature enacted changes to the state unemployment compensation law to establish a statutory scheme designed to exclude counties from the definition of 'employer' under unemployment compensation law, while ensuring that unemployment taxes or contributions would be made by fiscal intermediaries on behalf of the eligible service recipient. See sections 46.27 (5)(i) and 108.02 (13)(k), Stats. (4) No similar changes have been enacted into the workers compensation statutes. Moreover, prior to the enactment of those changes to the unemployment compensation statutes, the commission consistently concluded that counties were the employers, for unemployment compensation purposes, of personal care workers or similar workers providing services to eligible service recipients under the Community Options Program. (5)
"Therefore, after carefully considering the facts in this case and in light of the Kress factors, it must be concluded that the county is the applicant's employer under sec. 102.07 (1), Stats. It must also be concluded that the domestic servant exclusion under sec. 102.07 (4)(b), Stats., does not apply. The county is therefore liable for payment of worker's compensation benefits and medical expenses as set out below."
2. Add the following sentence to the twenty-first paragraph of the ALJ's Findings of Fact:
"In addition, the department retains jurisdiction for further action on a potential claim for loss of earning capacity pending the outcome Hagen v. LIRC, 201 Wis. 2d 51 (Ct. App., 1996), petition for review pending."
The findings and order of the administrative law judge, as modified, are affirmed.
Dated and mailed September 24, 1996
nickesh.wmd : 101 : 8 ND § 2.10; § 2.11
Pamela I. Anderson, Chairman
Richard T. Kreul, Commissioner
David B. Falstad, Commissioner
The ALJ's Findings of Fact did an excellent job of setting out the salient facts in this case. While the commission modified the ALJ's decision to substitute its legal analysis for his, the modifications were made largely to address legal arguments raised in the petition for review and accompanying briefs.
Finally, the applicant asked the commission to modify the ALJ's order to reserve jurisdiction for a loss of earning capacity claim, citing Hagen v. LIRC, supra. The commission has so modified the ALJ's order, consistent with the memo from Workers Compensation Division Administrator Gregory Krohm to workers compensation insurance carriers and self-insured employers, reference number Ins. 249, dated June 21, 1996.
cc: ATTORNEY ANTHONY W WELHOUSE
MURPHY GILLICK WICHT & PRACHTHAUSER
ATTORNEY JOSEPH DANAS JR
BORGELT POWELL PETERSON & FRAUEN SC
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(1)( Back ) The term "municipality" includes counties under sec. 102.01 (2)(d), Stats.
(2)( Back ) Kerns v. Guido-Lee, 107 Or. App. 721, 813 P.2d 758, review denied 312 Or. 525, 822 P.2d 1194 (1991) and Dana's Housekeeping, Inc., v. Department of Labor and Industry, 76 Wash. App. 600, 886 P.2d 1147 (1995). These cases are both annotated at 1C Larson, Workmen's Compensation Law, sec. 50.30, n. 49.1 (May 1996 supp.) The treatise cites no contrary authority.
(3)( Back ) The commission assumes sec. 102.07, Stats., was drafted to treat the state and municipalities in a specific subsection, separate from "others," to make it clear that the state and the municipalities are subject employers. State ex rel. Dept. of Public Instruction v. DILHR, 68 Wis. 2d 677, 681 (1975).
(4)( Back ) Enacted by 1989 Wis. Law 31, the 1989-90 biennial budget bill.
(5)( Back ) Milwaukee County v. DILHR and Chauncey Moore, Dane County Circuit Court case no. 136-210 (December 28, 1972); Milwaukee County v. DILHR and Mae Frances Anderson, Dane County Circuit Court case no. 141-413 (March 29, 1974); and Dane County v. LIRC and James Welcome, Dane County Circuit Court case no. 82 CV 4351 (May 15, 1983).