Wis.LIRC UC Decision: Ford, Kevin J. - May 29, 1998 - EE 410 - Independent Contractor or Employe - 'multi-factor' test - EE 413 - Independent Contractor or Employe - 'independently established' test (old law) - workers presumed employes of entity for which they perform services

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

KEVIN J FORD, Employer

UNEMPLOYMENT INSURANCE CONTRIBUTION LIABILITY DECISION
Account No. 618574, Hearing No. S9600283HA

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. The following paragraph is inserted after the second paragraph on page three of the appeal tribunal's FINDINGS OF FACT AND CONCLUSIONS OF LAW:

"(4) No evidence was presented establishing the degree to which the majority of the named individuals performed services for others, although Mr. Ford acknowledged that at least one of the individuals in question derived approximately 90% of his income from work performed for him. Under these circumstances, it cannot be found that the individuals in question were financially independent of Mr. Ford such that they could financially survive the discontinuation of their relationship with him."

2. The last sentence of the first full paragraph on page five of the appeal tribunal's FINDINGS OF FACT AND CONCLUSIONS OF LAW is deleted and the following sentence is substituted therefor:

"Although under the statute the inquiry would stop at that point, the appeal tribunal notes that if the second prong of the new statutory test were reached, the two individuals at issue would not have met the statutory requirements imposed by Wis. Stat. � 108.02(12)(b)2. a., c., d., f., g., or h."

DECISION

The decision of the administrative law judge is affirmed. Accordingly, Kevin J. Ford is liable for the payment of additional unemployment contribution taxes as more particularly set forth in the department's initial determination. This matter is remanded to the department to redetermine the employer's contribution liability in light of the exclusion of Bobby Peterson from statutory employment.

Dated and mailed May 29, 1998
fordkev.smd : 164 : 8 ET 410 ET 413

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

In the petition for commission review the employer argues that it assumed its sworn testimony that the individuals were independent contractors would be sufficient and was unaware that it was assumed to be "guilty" before the hearing even started. However, for the purposes of the unemployment statute, workers are presumed to be employe of the entity for whom they perform their services, and the putative employer bears the burden of presenting sufficient evidence to warrant a conclusion to the contrary. An employer cannot meet this burden merely by asserting that individuals are independent contractors. Instead, the employer is required to establish that the individuals in question satisfy the necessary statutory requirements to be considered other than employes. While the employer suggests that it was unaware of this requirement and implies that it was treated unfairly, the employer did receive a hearing notice which specifically informed it that the standards set forth in Wis. Stat. � 108.02(12) would be applied. Although it is unfortunate that the employer failed to familiarize itself with the statute prior to the hearing, this was a matter within the employer's control and is not evidence of unfair treatment on the part of the department.

Based upon its independent review of the evidence in the hearing record, the commission must agree with the appeal tribunal that the employer failed to present sufficient evidence to warrant a conclusion that the individuals in question were not its employes. While with its petition the employer attempts to present additional evidence in satisfaction of its burden of proof, the commission is unable to consider that evidence. As was explained to the employer in the hearing notice, the hearing was the employer's only opportunity to present evidence in support of its case. Because by law the commission is required to base its review solely upon the sworn testimony and documentary evidence which was presented before the administrative law judge, the commission will confine its review to that evidence which is already in the record and will disregard those factual assertions and documents which the employer presents for the first time with its petition for review.

Finally, in its petition the employer explains its ideas as to what constitutes an independent contractor and how an independent contractor is distinguished from an employe. However, while the employer's own definition of an independent contractor may be a valid one, the commission is required to apply the unemployment law as it was written by the legislature and lacks the authority to deviate from the standards set forth in the statute. Where the evidence in the hearing record did not establish that the individuals in question satisfied the statutory criteria to be excluded from coverage, the commission must conclude that they performed their services as employes of the employer. Accordingly, the appeal tribunal decision is affirmed.

NOTE: The commission has modified the appeal tribunal decision to include findings addressing the factor of economic dependence, since the decision contained no specific findings on that question. The commission has also modified the appeal tribunal decision to reflect the fact that, in addition to not meeting the statutory requirements of Wis. Stat. � 108.02(12)(b)2. a., c., f., g., and h., the two named individuals also did not satisfy that they were responsible for the satisfactory completion of their services. These modifications notwithstanding, the commission agrees with and affirms the appeal tribunal decision.

cc:
ATTORNEY PETER ZEEH
ENFORCEMENTS SECTION

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