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

JOSEPH HAUSER, Employer

UNEMPLOYMENT INSURANCE CONTRIBUTION LIABILITY DECISION
Account No. 673658, Hearing No. S9700157LX

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, except that it makes the following modifications:

1. Delete the second sentence of the seventh paragraph on page 6 of the appeal tribunal's FINDINGS OF FACT AND CONCLUSIONS OF LAW, and insert therefor:

"However, the success or failure of his work did depend on the relationship of receipts to expenditures."

2. In the first sentence of the eighth paragraph on page 6 of the appeal tribunal's FINDINGS OF FACT AND CONCLUSIONS OF LAW, delete "four" and insert therefor "five."

3. Delete the ninth paragraph on page 6 of the appeal tribunal's FINDINGS OF FACT AND CONCLUSIONS OF LAW, and insert therefor:

"In 1995, Mr. Fruechte earned in excess of $1,500.00 in wages in at least one quarter while performing services for Joseph Hauser."

DECISION

The decision of the administrative law judge, as modified, is affirmed. Accordingly, Joseph Hauser is obligated to report all wages for service to the department as of January 1, 1995.

Dated and mailed January 29, 1999
hausejo.smd : 132 : 1  EE 410  EE 410.08

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The appellant has petitioned for commission review of the adverse findings and conclusions of the administrative law judge that Duane Fruechte performed services for the appellant in 1995 and in 1996 as an employe and therefore the appellant became subject to the unemployment insurance law as of January, 1995. The appellant first argues that it did establish that Mr. Fruechte could realize a profit or suffer a loss under contracts to perform services. The commission disagrees. Condition f. requires more than that Mr. Fruechte could suffer a loss in the form of lost opportunity for additional work (or leisure) due to the requirement that he perform rework without additional compensation. The commission has generally held that potential loss of wages or opportunity is not sufficient to satisfy condition f. Further, profit potential is lacking particularly since Mr. Fruechte does not control labor charges. While it is possible that Mr. Fruechte would not make as much money as he could if everything went right, there is basically no way for Mr. Fruechte to lose money. Further, Mr. Fruechte is paid when he completes the work not when and if the customer pays, which further decreases any potential for loss. The appellant also argues that condition h. has been satisfied. The commission agrees and has modified the appeal tribunal decision. However, the appellant has still satisfied only five of the eight conditions. Therefore, the appellant has not satisfied its burden of establishing that the services performed by Mr. Fruechte were performed as an independent contractor. Accordingly, the commission affirms the appeal tribunal.

cc: David Morrison CPA
Morrison & Associates

Attorney Jorge Fuentes
Enforcements Section

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