Friday, September 07, 2012

UC - self-employment - indpt. contractor - 2-prong test

Jia v. UCBR - Cmwlth. Court - Septe.ber 7, 2012 - unreported memorandum opinion

In employment cases, an individual receiving wages for his services is presumed to be an employee, and the employer bears a heavy burden to overcome that presumption. Thomas Edison State Coll. v. UCBR, 980 A.2d 736, 741 (Pa. Cmwlth. 2009). To overcome this statutory presumption of employment, the employer must show that the individual performed the work free from the employer's control and direction, and that the work was done for others, not just the employer, as part of an independent trade. Sharp Equip. Co. v. UCBR, 808 A.2d 1019 (Pa. Cmwlth. 2006). “[U]nless the employer can show that the employee [is] not subject to his control and direction and [is] engaged in an independent trade, occupation or profession, then [the worker is an employee].” C.A. Wright Plumbing Co. v. UCBR, 293 A.2d 126, 129 (Pa. Cmwlth. 1972) (en banc); see also Sharp; Venango Newspapers v. UCBR, 631 A.2d 1384 (Pa. Cmwlth. 1993).

We hold that Employer did not overcome the strong presumption of Claimant’s status as an employee. While we question the Board’s determination regarding Employer’s purported control over Claimant, it is clear the Board erred in its resolution of the second prong involving an independent trade or business.

The Board’s only analysis of the two-prong test consists of three sentences: "The claimant worked pursuant to the independent contractor agreement both under the contract of service and in fact. The claimant had an independent business as an independent contractor. Therefore, the claimant was an independent contractor." The Board’s only finding related to his status as an independent contractor is a finding of fact that Claimant "could work for other contractors as long as there was no conflict of interest." The fact that Claimant signed a consulting contract is not dispositive of the work relationship. Nevertheless, the Board’s decision appears to rely entirely upon the existence of the consultant contract.

In considering the second prong of the test, we examine whether: (1) the claimant was capable of performing the activities in question for anyone who wished to avail themselves of his services; and, (2) the nature of the business compelled the claimant to look to only a single employer for continuation of work. Venango.

This Court recently emphasized the importance of an employer supplying evidence to show that a claimant is engaged in an independent business in Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593 (Pa. Cmwlth 2012). Similarly, and significantly, the record here lacks any evidence that Claimant customarily engaged in an independent business or performed programming services for any other business. As in Minelli and Sharp, Claimant’s testimony is clear that he was not so engaged, and there is no contrary evidence. The single act of signing the consulting contract here does not suffice. Sharp. The contract language providing that Claimant could work for others does not establish that he engaged in an independent business, and did work for others. Minelli. Moreover, the scope of work requires Claimant to work in Employer’s offices during specified business hours, thus undermining his ability to work for others. See Sharp. The test an employer must satisfy to overcome the presumption of an employment relationship is simply not met here.

The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.