HPM
Consulting v. UCBR – Cmwlth. Court (2-1) – April 13, 2018
Held: Claimant, a safety consultant, not
self-employed, despite written agreement stating that he was an independent
contractor.
Presumption
that individual is an employee
“Services
performed by an individual for wages shall be deemed to be employment subject
to this act, unless and until it is shown to the satisfaction of the department
that—(a) such individual has been and 4 will continue to be free from control
or direction over the performance of such services both under [his] contract of
service and in fact; and (b) as to such services such individual is customarily
engaged in an independently established trade, occupation, profession or
business. “ 43 P.S. § 753(l)(2)(B).
“The
purpose of Section 4(l)(2)(B) [of the Law] ‘is to exclude independent
contractors from coverage.’ Beacon Flag Car Co., Inc. (Doris Weyant) v.
Unemployment Comp[.] [Bd.] of Review, 910 A.2d 103, 107 (Pa. Cmwlth. 2006).
‘This provision presumes that an individual is an employee.’ Id. However, ‘this
presumption may be overcome if the putative employer sustains its burden of
showing that the claimant was free from control and direction in the
performance of [his] service and that, as to such service, was customarily
engaged in an independent trade or business.’ Id. ‘Unless both of these
showings are made, the presumption stands that one who performs services for
wages is an employee.’ Id. Minelli v. UCBR, 39 A.3d 593, 595-96 (Pa. Cmwlth.
2012).
The
employer did not overcome the strong presumption of Claimant’s status as an
employee. See Famularo Catering, Inc. v. Dep’t of Labor & Indus., 125 A.3d
866, 869 (Pa. Cmwlth. 2015) (quoting Electrolux Corp. v. Dep’t of Labor &
Indus., Bureau of Employer Tax Operations, 705 A.2d 1357, 1359–60 (Pa. Cmwlth.
1998) (“[A] person receiving remuneration for services rendered is presumed to
be employed and therefore to have ‘employment’ within the meaning of the [Law]
. . . .”)). “[T]he record here lacks any evidence that Claimant customarily
engaged in an independent business . . . .” Jia v. UCBR, 55 A.3d 545, 549 (Pa.
Cmwlth. 2012). “Claimant’s testimony is clear that he was not so engaged, and
there is no contrary evidence.” Id. “The test an employer must satisfy to
overcome the presumption of an employment relationship is simply not met here.”
Id.
Agreements not
dispositive
The
Commonwealth Court has “repeatedly held that the existence of an independent
contractor agreement is not dispositive of the work relationship,” Lello v. UCBR,
59 A.3d 1153, 1159 (Pa. Cmwlth. 2013). Nor is the fact that the claimant did not
receive a W-2 form dispositive of the issue.
In fact, the contracts here “contain
ample evidence supporting Claimant’s presumptive employee status which HPM, who
had the burden, did not overcome. For example, the contracts specified
Claimant’s hourly rate of pay as well as his overtime rate of pay, and per diem
expenses. . . .. In addition, the
contracts expressed that Claimant’s home trips “will be scheduled with approval
from the job site” and he consented to drug testing at the jobsite. . . . Further,
they provided that Claimant was responsible for his steel tip boots and
clothing but would be furnished all necessary equipment at the job site.
