Wis.LIRC WC Decision: Jensen - April 28, 1998 - ND � 2.2 - Generally - Employers; � 2.3 - Withdrawing from Coverage - "employer" status depends on wages for Wisconsin services by any workers, not just the injured worker - burden of proof - employer failing to bring records on issue of extent of covered wages

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

JEREMIAH JENSEN, Applicant

HAROLD MARTIN ROOFING, Employer

WISCONSIN WC UEF, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 97005804

An administrative law judge (ALJ) for the Worker's Compensation Division 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 order in that decision as its own.

ORDER

The findings and order of the administrative law judge are affirmed.

Dated and mailed: April 28, 1998
jenseje.wsd : 101 : 8 ND � 2.2; � 2.3

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

James A. Rutkowski, Commissioner

MEMORANDUM OPINION

1. Issue and the law.

The applicant has worked for Harold Martin Roofing (Martin Roofing), a handyman outfit, since 1994. Martin Roofing is a sole proprietorship, located in the upper peninsula of Michigan. While most of Martin Roofing's work was performed in Michigan, it did work in Wisconsin as well. The applicant was injured on August 6, 1996, while working on a job in Wisconsin.

The question is whether Martin Roofing is a covered employer under Wisconsin law. Wisconsin Statutes � 102.03(1)(b) provides that an employer is liable only where, at the time of injury, both the employer and employe are subject to the provisions of Wisconsin workers compensation law. Wisconsin Statutes � 102.04(1) defines "employer subject to the provisions of this chapter" to include:

102.04(1)(b) 1. Every person who usually employs 3 or more employes whether in one or more trades, businesses, professions or occupations, and whether in one or more locations.

2. Every person who usually employes less than 3 employes, provided the person has paid wages of $500 or more in any calendar quarter for services performed in this state. Such employer shall become subject on the 10th day of the month next succeeding such quarter.

An employer who becomes subject to the workers compensation law under Wis. Stat. � 102.04(1)(b), but whose conditions later change so the employer no longer meets the minimums for workers or payroll, may withdraw under Wis. Stat. � 102.05(1). If an employer has no employes at all for a continuous two year period, it is deemed to have withdrawn as of end of those two years. If the employer continues to have employes, but falls below the minimum number of workers or minimum payroll, it must file a withdrawal notice.

The applicant and others worked on jobs Martin Roofing undertook in Wisconsin for various periods from 1994 to the date of injury on August 6, 1996. The question in this case is whether the work performed in Wisconsin was sufficient to make Martin Roofing a "covered employer" under Wisconsin law and, if so, whether Martin Roofing may be deemed to have "withdrawn" from coverage by the passage of time.

The ALJ found that Martin Roofing did not usually employ three employes. However, the ALJ concluded that Martin Roofing was a covered employer by virtue of having paid the applicant $500 for services in Wisconsin in at least one quarter in 1994. The ALJ also concluded that Martin Roofing never effectively withdrew from coverage. (1 )

The Wisconsin Workers Compensation Uninsured Employers Fund (the respondent) appealed. (2 ) On appeal, the respondent argues that the ALJ erred in concluding that Martin Roofing paid $500 in wages in a quarter for services performed in Wisconsin. In its response brief, the applicant requests the commission to affirm the ALJ's decision, but modify it to also find that Martin Roofing usually employed three employes.

2. Discussion.

The ALJ's main finding in this case is that the employer paid wages of $500 or more in a calendar quarter for services performed in this state. This finding relies on the applicant's testimony about a remodeling job for Marge and Dwayne Saders, (hereafter "the Saders job") in Florence, Wisconsin, in June and July 1994.

The applicant testified the Saders job lasted four to six weeks. He testified that the Saders job involved remodeling the bedrooms and kitchen, adding closets, and installing a new kitchen floor, new entrance doors, and two decks. He testified he and sole proprietor Martin did the work, and that he worked all four weeks in June 1994 and a week in July 1995. On cross- examination, he admitted he could have worked up to three weeks in either month. He also testified he worked 40 hour weeks at $5.50 per hour, and made a little more than $200 (actually $220) per week while he worked on the Saders job.

The applicant testified he worked another job in Wisconsin in May or June 1995, putting in a deck for the Saders' daughter. This lasted a week or two, and the applicant worked with Jason Martin, a son of sole proprietor Martin. He testified that he worked on a third job in Wisconsin in June 1996 when he worked a half day painting, and another Martin son, Jamie Martin, worked three days. The applicant testified to a fourth Wisconsin job, building a garage, in June and July 1996. On this occasion, he worked with Jamie Martin and a third worker, Gino Hansen. This project lasted five or six days. The applicant, Gino and a third worker did a fifth Wisconsin job, a roofing project, in July 1996, working two or three days. Finally, the applicant, Jamie Martin and Gino Hansen worked on sixth Wisconsin job, this one another roofing job in Spread Eagle, in August 1996. It was this job, lasting three to five days, in which the applicant was hurt.

By comparison, the testimony of sole proprietor Martin is much less precise. He could not recall whether or not his business had any Wisconsin jobs in 1995 or 1996, and that he did not keep records one way or another. He recalled building a deck for Marge and Dwayne Saders, but could not recall when that was. He did not recall doing work for the Saders's daughter, but admitted he did not pay much attention. He deferred to his wife, the business book-keeper.

Linda Martin, Harold's wife, also testified. She first stated she could construct Wisconsin employment from her records, then reported that no Wisconsin work was done in 1994. However, documents filed by Martin Roofing's attorney with DWD indicated that services were performed by an employe for Martin Roofing in the summer of 1994. Exhibit E.

When confronted with this, Linda Martin admitted that she in fact did not have adequate records to reconstruct "all of this." She acknowledged that the applicant worked on the Saders job in either 1993 or 1994. She admitted the Saders job involved remodeling, but testified it only lasted three weeks. She testified the applicant would not have made $500 in three weeks, though she admitted the applicant got paid $5.50 an hour at the time (three 40-hour weeks at $5.50 per hour equals $660). She later admitted the job was between 3 weeks and one month in duration, but denied it lasted 6 weeks.

The respondent argues that the applicant has the burden of proof, as the ALJ acknowledged in his decision, and that the commission must therefore view the evidence in that light. In other words, the respondent asserts the commission must assume that the applicant only worked four weeks on the Saders job, two weeks in June 1994 and two weeks in July 1994. Since this would yield only $440 in the second calendar quarter of 1994 and $440 in the third calendar quarter, Martin Roofing would not be a covered employer.

The commission cannot agree. True, the applicant testified during cross-examination that the Saders job lasted four to six weeks, and could have been up to three weeks on either side of June and July 1994. However, the commission is not obligated to construe this testimony in the light least favorable to the applicant as the employer suggests. The commission instead concludes that the best view of the evidence indicates that the applicant worked three full weeks in either June or July of 1994, as the ALJ found, so was paid wages of at least $500 in one calendar quarter for services performed in this state.

First, of course, the applicant initially testified he worked all four weeks in June 1994 on the Saders job and maybe one week in July. The applicant understandably was not absolutely positive about his June 1994 work schedule at the hearing over three years later. However, the commission concludes the applicant's initial testimony on this point is the most reliable in the record, that he therefore worked at least three weeks in June 1994 in Wisconsin, and that the employer paid at least $500 in a calendar quarter for services performed in this state well before the August 1996 injury at issue here.

Moreover, the commission notes that the definition of "employer" refers to wages paid for any services performed in Wisconsin by any employe, not just services performed by the injured worker as is the situation here. The overly rigorous application of the burden of proof advocated by the respondent would require an injured worker hurt on his first day on the job to prove the extent of Wisconsin employment by coworkers or former workers in prior quarters, possibly an impossible job if the employer did not keep records. In other words, the commission declines to apply the burden of proof to shield Martin Roofing from its liability for benefits by failing to bring records to the hearing which would settle the issue at best or rebut the applicant's hearing testimony on the issue at least.

With respect to the argument raised by the applicant in his brief, the ALJ found that Jamie Martin, and inferentially Gino Hansen and the applicant, were employes of Martin Roofing. However, he did not believe that Martin Roofing usually employed three workers. He found that Jamie Martin was only working on the date of injury as a happenstance of his being home at the time. He also found that Martin Roofing's work was usually done by sole proprietor Harold Martin, or by Harold Martin and the applicant. The ALJ's finding is consistent, on the record as it stands, with the purpose of the use of the term "usually" in Wis. Stat. � 102.04 (1) which is to prevent short-term changes in the number of employes resulting in oscillation between coverage and noncoverage. See: 4 Larson, Workers Compensation Law, � 52.20 (1997).

cc: ATTORNEY TONY WELHOUSE
WELHOUSE LAW OFFICE

ATTORNEY JEFFREY J STRANDE
TERWILLIGER WAKEEN PIEHLER & CONWAY SC

ATTORNEY DOUGLAS J DREXLER

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Footnotes:

(1)( Back ) Martin Roofing never filed a withdrawal notice. Nor does the record indicate that withdrawal should be "deemed" on the lack of Wisconsin employment for two years. The ALJ therefore correctly concluded that the Wis. Stat. � 102.05 defense, which the respondent admittedly does not raise, is inapplicable.

(2)( Back ) Martin Roofing is uninsured, so the uninsured employers fund is liable under Wis. Stat. � 102.81 if Martin Roofing is a covered employer.