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

JOHN E JARRETT, Applicant

B & D MOTORS INC, Employer

REGENT INSURANCE CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 96041644

The employer submitted a petition for commission review alleging error in the administrative law judge's Findings and Interlocutory Order dated August 6, 1997. The applicant submitted an answer to the petition and both parties submitted briefs. At issue is whether the applicant was an employe versus an independent contractor status and therefore covered under the Act.

The commission has carefully reviewed the entire record in this matter and hereby sets aside the findings and order below, and substitutes the following therefor:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant began working for the employer, a trucking company, in December 1992 and he testified that the relationship was on a full-time basis. The applicant testified that he owned his own truck at that time and he was contracted to be paid 75 percent of the gross receipts. The applicant testified that he paid his own fuel, maintenance and road repairs and that he had received his federal ID number in 1980. The applicant testified that he made the repairs to the truck that he was able to do himself, and he kept the records at his home, meaning the log books as well as the basic tools. The applicant testified that he paid all of his expenses out of the 75 percent gross receipts. The applicant testified that the employer controlled where he would pick up the load and would also control the routes, although on cross-examination the applicant testified that he would pick which routes to take.

The evidence also indicated that on June 1, 1993, the applicant purchased a different vehicle, and the title was put in the employer's name because of the applicant's severe problems with the Internal Revenue Service. The employer's owner, Mr. Iebke, testified that the employer deducted the amount for payments for the truck out of the applicant's gross receipts over a period until the truck was paid for, at which time the employer signed the title over to the applicant. Mr. Iebke noted that the applicant had control and possession of the truck and he had worker's compensation insurance plus property damage insurance and liability insurance on the truck. Mr. Iebke testified that the applicant was responsible for the maintenance and repairs on the truck and when the employer happened to do some maintenance the bill would be given to the applicant for the maintenance expense. The applicant was injured on December 15, 1994, and was subsequently terminated by the employer.

Under Wis. Stat. § 102.07 (4), every person in the service of another under any contract of hire express or implied, all helpers and assistants of employes, whether paid by the employer or employe, if employed with the knowledge, actual or constructive of the employer, is an employe covered under the Act. However, under Wis. Stat. § 102.07 (8)(b), an independent contractor is not an employe of an employer for whom the independent contractor performs work or services if the independent contractor meets the following nine conditions:

1. Maintains a separate business with his or her own office, equipment, materials and other facilities;

2. Holds or has applied for a federal employer identification number;

3. Operates under contracts to perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work;

4. Incurs the main expenses related to the service or work that he or she performs under contract;

5. Is responsible for the satisfactory completion of work or services that he or she contracts to perform and is liable for a failure to complete the work or service;

6. Receives compensation for work or service performed under a contract on a commission or per job basis;

7. May realize a profit or suffer a loss under contracts to perform work or service;

8. Has continuing recurring business liabilities or obligations;

9. The success or failure of the independent contractor's business depends on the relationship of business receipts to expenditures.

The administrative law judge held that the employer had met its burden of proof to establish that the applicant was an independent contractor pursuant to Wis. Stat. § 102.07 (8), on December 15, 1994. The commission agrees. However, the administrative law judge went on to determine that the applicant had met his burden of proof to establish pursuant to the common law of the State of Wisconsin that he was an employe of the employer on December 15, 1994, and made a determination pursuant to Wis. Stat. § 102.07 (4), as to whether the applicant was an employe pursuant to that section as amplified by the common law of the State of Wisconsin. The employer contends in its petition for commission review that the administrative law judge simply took his analysis too far and came to ultimate findings and conclusions which were contrary to the law. The commission agrees.

Wis. Stat. § 102.07 (4), is a general statutory provision providing a broad definition of who is included in the definition of an employe under the Act. Wis. Stat. § 102.07 (8)b, provides a specific exception to the definition of employe for independent contractors who meet nine specific criteria listed in the statutes. The commission finds that it was the intent of the legislature to provide that if an employe meets the requirements of the nine criteria in Wis. Stat. § 102.07 (8)(b), as an independent contractor that the employe cannot be considered an employe under Wis. Stat. § 102.07 (4).

The commission finds that the evidence established that the applicant met the nine criteria in Wis. Stat. § 102.07 (8)(b). The applicant testified that he was paid according to a contract for 75 percent of the gross receipts out of which he paid for his own maintenance and road repair. The applicant testified that he kept his own records at his home and that he owned his own truck and equipment and performed some of his own repairs. In addition, the evidence indicated that the applicant had his own federal ID number beginning in 1980, and that he was responsible for the repairs, tires and insurance.

The employer submitted evidence of the contract that the applicant signed with the employer in which the applicant was responsible for the operation and maintenance of the equipment and was responsible to pay all of the costs and expenses incident to the performance of hauling under the contract. The contract indicates that it was the intention of the parties that the applicant should remain an independent contractor who was paid 75 percent of the gross receipts for his work. The contract included a termination clause in which either party could terminate the contract upon 30-days notice to the other without cause. It is clear that the applicant incurred the main expenses related to the services that he performed and that he would provide for payment for such expenses out of his gross receipts, and that the applicant was responsible for the completion of the work or services under the contract. Based on the applicant's testimony, as well as the evidence of the written contract, the commission finds that the evidence did establish that the applicant met the nine criteria pursuant to the provisions in Wis. Stat. § 102.07 (8)(b). It was not established that the applicant was an employe under the Act. Therefore, the applicant's claim for benefits pursuant to the Act must be dismissed.

NOW, THEREFORE, this

ORDER

It was not established that the applicant was an employe within the meaning of the Workers Compensation Act. Therefore the applicant's claim for benefits based on a work-related injury in December 1994 must be dismissed.

Dated and mailed: March 12, 1998
jarrejo.wrr : 175 : 7 ND § 2.13

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

NOTE: The commission did not consult with the administrative law judge concerning the credibility and demeanor of witnesses. The commission's order is not based on a different impression of the witnesses credibility.

cc:

ATTORNEY JAMES T RUNYON
RUNYON LAW OFFICES LAW

ATTORNEY WALTER D THUROW
OFFICE OF WALTER D THUROW

Appealed to Circuit Court. Set aside and remanded for further proceedings April 8, 1999. Circuit Court decision reversed by Court of Appeals, and LIRC decision reinstated, January 25, 2000. [Court of Appeals Decision]

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