Tuesday, April 07, 2015

UC - employee v. indpt. contractor - burden of proof

Larry Fry Drywall v. Office of UC Tax Assessment Services – Pa. Cmwlth. – April 7, 2015 – unreported memorandum opinion



The court affirmed the OUCTAS finding that the employer had wrongly considered its employees to be independent contractors.  The Office assessed the employer ~$36,000 for unpaid UC taxes.


“A determination regarding the existence of an employer-employee relationship is a question of law that depends on the unique facts of each case.” Kurbatov v. Dep’t of Labor & Indus., Office of Unemployment Comp., Tax Servs., 29 A.3d 66, 70 (Pa. Cmwlth. 2011). “[T]here is a presumption in the [UC] Law that an individual receiving wages is an employee and not . . . engaged in self-employment.” Training Assocs. Corp. v. Unemployment Comp. Bd. of Review, 101 A.3d 1225, 1234 (Pa. Cmwlth. 2014) (quoting Pasour v. Unemployment Comp. Bd. of Review, 54 A.3d 134, 137 (Pa. Cmwlth. 2012)).


The [UC Law] goes very far, and properly so, and places a very heavy burden on the applicant when it makes payment to anyone who has performed . . . services to excuse or exempt that payment from the unemployment compensation tax. Few indeed are the instances where that burden can be met. . . .

Kurbatov, 29 A.3d at 71 (quoting Am. Diversified Corp. v. Bureau of Employment Sec., Dep’t of Labor & Indus., 275 A.2d 423, 426 (Pa. Cmwlth. 1971)). “This Court . . . emphasized the importance of an employer supplying evidence to show that a claimant is engaged in an independent business . . . .” Peidong Jia v. Unemployment Comp. Bd. of Review, 55 A.3d 545, 549 (Pa. Cmwlth. 2012) (emphasis added).


Here, the Department found that the employer did not furnish any of the documentation requested by the Office to establish that its workers were independent contractors, including any documentation showing that the workers had their own businesses or were paying UC taxes.  


“The test an employer must satisfy to overcome the presumption of an employment relationship is simply not met here.” Peidong Jia, 55 A.3d at 549.




The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent."    210 Pa. Code 69.414.


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