Victor v. Department of Labor & Industry

NEWMAN, Judge,

dissenting.

I respectfully dissent. Because I believe that the aides who participate in the registry service of William R. Victor, t/a Victor’s Helping Hands (Victor), are independent contractors, and not employees of Victor, I would reverse the order of the Department of Labor and Industry, Bureau of Employer Tax Operations (Department), and grant Victor’s petition for reassessment.

In affirming the order of the Department, the majority correctly states that the burden is on the alleged employer to bring itself within the exceptions to “employment” under Section 4(1)(2)(B) of the Unemployment Compensation Law (Law).1 That section provides, in pertinent part, as follows:

Services performed by an individual for wages should 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 any independently established trade, occupation, profession, or business.

*67343 P.S. § 753(1)(2)(B). Whether a party is employed or self-employed under this section is a question of law subject to our review. Attorneys on Call v. Unemployment Compensation Board of Review, 155 Pa.Commonwealth Ct. 96, 624 A.2d 754 (1993).

I agree with the majority that unless the purported employer proves both elements of Section 4(1)(2)(B), the presumption stands that an individual who performs services for wages is an employee and not an independent contractor. Venango Newspapers v. Unemployment Compensation Board of Review, 158 Pa.Commonwealth Ct. 379, 631 A.2d 1384 (1993). I disagree with the majority, however, that Victor failed to meet this burden.

With respect to the first element, this court has held that one need not actually exercise control in order to be considered an employer; rather, the mere right or authority to exercise control or interfere with the work creates an employment relationship. Crenshaw v. Unemployment Compensation Board of Review, 50 Pa.Commonwealth Ct. 136, 412 A.2d 682 (1980). This court, in further defining this standard, has held that the following factors should be examined when determining whether one is under the control of a purported employer: whether there was on-the-job training, whether tools were supplied, whether there were regular meetings to attend, whether there was a fixed rate of remuneration and whether taxes were deducted from the worker’s pay. Attorneys on Call.

When applying these factors to the present appeal, I note that although Victor provides time sheets to the aides, Victor does not furnish any other materials or equipment to them. Direct day-to-day supervision by Victor of the aides’ activities is also lacking.2 After Victor refers an aide to a client, the client and the aide, not Victor, negotiate the job “particulars,” such as hours, days and responsibilities. Victor does not play *674any role in the aide’s actual job performance once the client and the aide make contact.

I further note that the aides on Victor’s registry negotiate their own wages with the client, and the client directly pays the aides their share of Victor’s fee.3 The aides also are free to refuse any assignment, and a refusal does not result in removal of their names from the registry list.

Last, pursuant to the terms- of the registration agreement, the aides are self-employed and agree to pay their own taxes. I note that the majority, relying on Hoey v. Department of Labor & Industry, Bureau of Employment Security, 92 Pa.Commonwealth Ct. 462, 499 A.2d 1124 (1985), is correct that this fact alone is not in and of itself proof that the aides are independent contractors. However, this fact is not the only indication that the aides enjoyed independent contractor status.

Therefore, upon consideration of all of the above factors, I believe that there is ample support in the record for a conclusion that the aides are not under Victor’s control. As such, I would hold that Victor satisfied the first element of Section 4(1)(2)(B) of the Law.

As to the second element of whether an individual is customarily engaged in an independently established profession, this court has stated:

[i]n interpreting the meaning of ‘customarily engaged’ and ‘independent business’ important factors have been whether the individual held himself out or was eapáble of performing the particular activities in question for anyone who wished to avail himself of such services and whether the nature of the business compelled the individual to look to only a single employer for the continuation of such services.

Jochynek v. Unemployment Compensation Board of Review, 32 Pa.Commonwealth Ct. 86, 90, 378 A.2d 490, 492 (1977).

*675In concluding that Victor failed to satisfy the second prong, the majority unduly emphasizes the fact that by the terms of the registration agreement, the aides agreed that they would “not work on ... [their] own, at any later date, for someone originally assigned to ... [them] by the Registry.” I do not believe, however, that the contract provision alone should be dispositive of this issue.

As professionals, the aides on Victor’s registry hold, themselves out as capable of performing particular skills for anyone who wishes to avail himself or herself of such services, with the exception of Victor’s clients. While the aides are prevented from seeking employment from Victor patients for whom they had previously provided care, the registration agreement does not prohibit the aides from seeking employment from other home health care providers in the industry. Accordingly, the nature of the home health care business does not compel the aides to look to a single employer for the continuation of such services. In fact, two of the aides testified that while listed on Victor’s registry, they simultaneously worked for nursing homes as nurses’ aides.

Moreover, I note that this case is readily distinguishable from Jochynek. In Jochynek, this court addressed the issue of whether the local registrar of vital statistics for the Department of Health was an employee or independent contractor for the purpose of determining her entitlement to unemployment compensation benefits after she was removed from office. In holding that the local registrar was an employee, and not an independent contractor, we relied upon, inter alia, the facts that she was not employed by anyone other than the Department while employed as the local registrar, and she could not perform her particular service (namely, the issuance of certificates), once she was removed from the position. Unlike the Jochynek claimant, the aides in the present case worked for other health care providers while listed on Victor’s registry and are certainly capable of performing their particular services for providers other than Victor.

Upon consideration of the above factors, I believe that there is ample support in the record for a conclusion that the aides *676were customarily engaged in an independently established profession. As such, I would hold that Victor satisfied the second element of Section 4(1)(2)(B) of the Law.

Because I believe that Victor has satisfied both prongs of Section 4(1)(2)(B), I would reverse the order of the Department and grant Victor’s petition for reassessment.

. Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 753(1)(2)(B).

. On occasion, Victor instructs the aides on how to perform certain services. However, this instruction is usually done at the initial interview with the client.

. Victor generally charges its clients a fee between $7 and $9 per hour, depending on the level of skill required. The client directly pays Victor its portion of the fee. While Victor’s portion of the fee varies from $1.25 to $2.50 per hour, the aides usually receive an hourly wage of $6.00.