Tuesday, April 05, 2016

UC - indpt. contractor - side business - necessity of findings on key issues

Spencer v. UCBR – Cmwlth. Court – April 1, 2016 – unreported* memorandum opinion


Held:  Case remanded failure of UCBR to make findings about whether claimant was “customarily engaged in an independent trade or business,” as required under Section 4(l)(2)(B) of the Law, which  sets forth a presumption that one who performs services for wages is an employee — and thus not ineligible for benefits under section 402(h) — as opposed to an independent contractor — who is ineligible for benefits under section 402(h). Stage Road Poultry Catchers v. Department of Labor and Industry, Office of Unemployment Compensation Tax Services, 34 A.3d 876, 889 (Pa. Cmwlth. 2011).

The presumption in favor of employee status is overcome and the claimant will be considered an independent contractor if the putative employer establishes that: (1) the claimant was free from control and direction in performing the services; and (2) the services are of a type customarily performed in an independent trade or business. CE Credits Online v. Unemployment Compensation Board of Review, 946 A.2d 1162, 1167 (Pa. Cmwlth. 2008). The issue of whether an individual is an employee or independent contractor under section 4(l)(2)(B) of the Law is a question of law, subject to this Court’s review. Stage Road Poultry Catchers, 34 A.3d at 888.

First prong - The existence of an independent contractor agreement is not dispositive, although it is a significant factor to be considered. Stage Road Poultry Catchers, 34 A.3d at 889. Other factors include: whether there is a fixed rate of remuneration; whether taxes are withheld from the individual’s pay; whether the employer supplies the tools necessary to carry out the services; whether the employer provides on-the-job training; and whether the employer holds regular meetings that the individual was expected to attend. Id.

Second prong - The following three factors generally guide our inquiry: (1) whether the claimant is able to work for more than one entity; (2) whether the nature of the business compelled the individual to look to only a single employer for the continuation of such services; and (3) whether the claimant worked on a job-by-job basis and was free to accept or reject assignments. Danielle Viktor, Ltd. v. Department of Labor and Industry, Bureau of Employer Tax Operations, 892 A.2d 781, 797-98, 801-02 (Pa. 2006); Gill v. Department of Labor and Industry, Office of Unemployment Compensation Tax Services, 26 A.3d 567, 570 (Pa. Cmwlth. 2011). Where the employee is free to accept or reject an assignment, or has sole control over the days in which he/she will work, the individual is generally not considered to look to a single employer for the continuation of such services. Danielle Viktor, 892 A.2d at 801.

Moreover, as part of the second prong, the putative employer must also demonstrate “that the claimant [was] customarily engaged in such trade or business in order to be considered self-employed.” Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593, 598 (Pa. Cmwlth. 2012) (en banc) (emphasis in original).   However, and most significantly, the Board failed to make any findings or legal determination as to whether Claimant was “customarily engaged” in the business of selling insurance. See Minelli, 39 A.3d at 598. Indeed, in its brief to this Court, the Board overlooks the “customarily engaged” analysis altogether.   We have repeatedly noted that in proceedings such as these, where the claimant is already receiving benefits, the question presented is not whether the work at issue would entitle the claimant to benefits, but, rather, whether it disqualifies the claimant from further receipt of benefits he is already receiving. Minelli, 39 A.3d at 598 n.7. On this reasoning, this Court has determined that the Law requires the putative employer to demonstrate “an additional element, that the claimant be customarily engaged in such trade or business in order to be considered self-employed.” Id. at 598 (emphasis in original)

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* An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

If the case is old, the link may have become stale and may not work, but you can use the case name, court, and date to find the opinion in another source (e.g., Westlaw, Lexis, Google Scholar)




UC - employee v. indpt. contractor

PSU KnowHow v. UCBR – Cmwlth. Court – unreported* memorandum opinion – March 31, 2016


Held:    Some 300 tutors for private tutoring company held to be “employees” rather than independent contractors, resulting in affirmance of Department of Labor & Industry assessment of UC contributions against company. 

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*An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

If the case is old, the link may have become stale and may not work, but you can use the case name, court, and date to find the opinion in another source (e.g., Westlaw, Lexis, Google Scholar)

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