Tuesday, May 01, 2018

UC - indpt. contractor - self-employment - claimant not self-employed

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.