Deenis v. UCBR -= Cmwlth. Court – October 26, 2020 – unreported memorandum decision**
http://www.pacourts.us/assets/opinions/Commonwealth/out/475CD19_10-26-20.pdf?cb=1
Held: UCBR decision holding claimant to be an indpt. contractor remanded for consideration under A Special Touch v. Dep’t of Labor & Indus., Office of Unemployment Comp. Tax Servs., 228 A.3d 489 (Pa. 2020), which had not been handed down at the time of the UCBR decision.
The dispositive issue is whether the Board erred in determining that Claimant was an independent contractor. Section 402(h) of the Law provides in relevant part that a person is ineligible for unemployment compensation in any week in which he is “engaged in self-employment.” 43 P.S. § 802(h).
Self-employment is not a defined term under the Law. Thus, courts look to the definition of “employment” set forth in Section 4(l)(2)(B) of the Law, 43 P.S. § 753(l)(2)(B), which provides in relevant part: 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 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.
Before an individual will be declared to be self-employed, both elements of Section 4(l)(2)(B) must be satisfied. Silver v. UCBR, 34 A.3d 893, 896 (Pa. Cmwlth. 2011).
Pursuant to the two-prong test, the Court first examines the degree of control or direction over the work performed, and second, whether the individual is customarily engaged in an independently established trade, occupation, profession, or business. Jia v. UCBR, 55 A.3d 545, 548 (Pa. Cmwlth. 2012). An alleged employer asserting that an individual is not eligible for benefits because that person is self-employed bears the burden of proof. C E Credits OnLine v. UCBR, 946 A.2d 1162, 1167 (Pa. Cmwlth. 2008). There is a presumption that someone receiving wages is an employee and the alleged employer bears a heavy burden to rebut the presumption. Jia, 55 A.3d at 548.
With respect to the “direction and control” prong of the independent contractor test, no single factor is controlling and the ultimate conclusion must be based on the totality of the circumstances. Pasour v. UCBR, 54 A.3d 134, 138 (Pa. Cmwlth. 2012). In reviewing this prong, we have considered factors such as whether there was a fixed rate of remuneration; taxes were withheld; the employer provided the tools or training to perform the job; the employer set the time and location of work; and the employer could review the claimant’s performance. C E Credits OnLine, 946 A.2d at 1168.
In this case, it is with regard to the second prong, which requires the presumed employer to establish that an individual is customarily engaged in an independently established trade, occupation, profession, or business, that the result is not clear. With respect to this determination, the courts have considered factors such as the negotiation of different rates, variable compensation, and responsibility for one’s taxes, Attorneys On Call v. UCBR, 624 A.2d 754, 756-57 (Pa. Cmwlth. 1993), as well as the submission of invoices for services rendered, C E Credits OnLine, 946 A.2d at 1168. Commonwealth Court has also held that an independent contractor agreement is not determinative of a claimant’s status but is nonetheless an important factor to consider. Hartman v. UCBR, 39 A.3d 507, 511-12 (Pa. Cmwlth. 2012).
Historically, courts have also placed great significance on whether the claimant was permitted or able to perform “the activities in question to [any others] who wished to avail themselves of the services.” Resource Staffing, Inc. v. UCBR, 995 A.2d 887, 892 (Pa. Cmwlth. 2010). However, the Pennsylvania Supreme Court recently held that “the phrase ‘customarily engaged’ requires that an individual actually be involved, as opposed to merely having the ability to be involved, in an independently established trade, occupation, profession, or business[.]” A Special Touch, 228 A.3d at 505-06. Such a determination is fact dependent. Id. at 505. In other words, it appears that a claimant must actually provide services for others, or at least make plans or some attempt to do so.
Here, the supported findings of fact were that Claimant signed the Agreement providing that the client would not treat him as an employee for any purpose. The Agreement also provided for different rates of compensation for different tasks, renegotiation of the agreed-upon rate if the parameters of the work changed, submission of invoices for work completed, and, significantly, a provision that he could work for others. These findings clearly would have established that Claimant was self-employed under the controlling case law at the time of the referee’s hearing and the Board’s decision.
However, the criteria for independent contractor status has been modified in relevant part by the Supreme Court’s holding in A Special Touch but, because that case had not yet been decided, the Board had no opportunity to consider Claimant’s case under the new standard. Accordingly, the case will be remanded so that the Board can do so.
**An unreported Commonwealth Court case can be cited for its persuasive value, even thought it is not a binding precedent. See 210 Pa. Code § 69.414(b) and Pa. R.A.P. 3716
