Gill v. Department of Labor & Industry, Office of Unemployment Compensation Tax Services
This text of 26 A.3d 567 (Gill v. Department of Labor & Industry, Office of Unemployment Compensation Tax Services) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
OPINION BY
Patricia Gill, D/B/A Interstate Installation (Gill), petitions for review of the July 12, 2010, order of the Department of Labor and Industry (Department), which denied Gill’s petition for reassessment of its unemployment taxes, concluding that Gill failed to prove that flooring installation helpers who assisted GUI’s flooring installers were independent contractors. We reverse.
Gill is the sole proprietor of Interstate Installation, which is in the business of flooring installation. Most of Gill’s customers come by referral from Rusbosin Furniture store. Gill’s husband, Tom, manages the business, prices jobs for customers and presents bids. When Gill receives approval from a customer to do a job, Gill contacts a flooring installer to perform the work. Gill and her husband *569 are not present at the work site during a job. (Findings of Fact, Nos. 1-2, 4-7.)
With respect to the flooring installers, Gill has engaged persons that she has discovered by word of mouth or persons who have contacted Gill seeking work. Gill pays the flooring installers 25% to 50% of the total price for the job. Gill does not provide them any tools, does not train them and does not provide any insurance for them. The flooring installers are free to work for others. (Findings of Fact, Nos. 8-13.)
Bill Updyke, who has his own flooring installation business, has been engaged by Gill to install flooring. Updyke sometimes brings other individuals with him to do a flooring installation job. These installation helpers provide their own tools and, unless the weather is bad, provide their own transportation to the work site. Updyke directs their work, if necessary, and provides training. Installation helpers are usually paid by the hour based on their skill and knowledge. At the conclusion of a job, Updyke submits time records for the installation helpers to Gill, and Gill pays them. When the installation helpers assist Updyke on jobs that he does not perform for Gill, Updyke pays the installation helpers himself. (Findings of Fact, Nos. 14-26.)
The Office of Unemployment Compensation Tax Services (Tax Services Of-flee) conducted an audit of Gill’s records, including 1099 forms, Gill’s check register and cancelled checks. As a result, the Tax Services Office issued a notice of assessment against Gill for wages paid to the installation helpers in 2004, 2005, 2006 and 2007. Gill filed a petition for reassessment with the Department, claiming that the installation helpers were independent contractors, not employees. After a hearing, the Department rejected Gill’s claim and denied Gill’s petition. The Department explained that, although Gill testified that the installation helpers had their own businesses, Gill did not specifically testify that their businesses offered installation helper services, as opposed to other types of services. 2 (Department’s Final Decision at 11.) Gill now petitions this court for review. 3
Gill argues that the Department erred in concluding that the installation helpers were not independent contractors. We agree.
Section 4(l )(2)(B) of the Unemployment Compensation Law (Law) 4 provides as follows:
Services performed by an individual for wages[ 5 ] 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 per *570 formance 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(i)(2)(B) (emphasis added). The Department concedes that the installation helpers were free from Gill’s control or direction. The question is whether, under (b), Gill proved that the installation helpers were customarily engaged in an independently established trade, occupation, profession or business involving installation helper services.
In Danielle Viktor, Ltd. v. Department of Labor and Industry, Bureau of Employer Tax Operations, 586 Pa. 196, 892 A.2d 781 (2006), our Supreme Court stated that, with respect to (b), the relevant statutory word is “independently,” which means:
not dependent: as ... not subject to control by others: not subordinate: self-governing, autonomous, free ... not affiliated with or integrated into a larger controlling unit (as a business unit) ... not requiring or relying on something else (as for existence, operation, efficiency).
“Dependent” is defined as, inter alia, “unable to exist, sustain oneself, or act suitably or normally without the assistance or direction of another ...: connected in a subordinate relationship: subject to the jurisdiction of another”
Id. at 218, 892 A.2d at 794-95 (citing Webster’s Third New International Dictionary 1148 (1986)) (citation omitted) (ellipses in original). Based on these definitions, the Supreme Court stated that persons are independent contractors if they are not subject to the control of the company; are not a unit or other component of the company; are not connected in a subordinate manner to the company; do not depend on the company for their existence, operation or efficiency; would not be out of employment if the company were to cease conducting business; are free to perform their services for any other company; and are not compelled to look to the company for the continuation of their ability to provide services. Id. at 218-19, 892 A.2d at 795.
Ultimately, our Supreme Court approved this court’s consideration of three factors: (1) whether the individuals are able to work for more than one entity; (2) whether the individuals depended on the existence of the presumed employer for ongoing work; and (3) whether the individuals were hired on a job-to-job basis and could refuse any assignment. Id. at 222-23, 892 A.2d at 797-98; see Osborne Associates, Inc. v. Unemployment Compensation Board of Review, 3 A.3d 722, 728 (Pa.Cmwlth.2010).
As to the first factor, the Department found that the installation helpers worked on flooring installation jobs for Updyke when Updyke was not performing services for Gill. Thus, the installation helpers were able to assist other flooring installers who wished to avail themselves of the services. As to the second factor, the fact that they also worked for Updyke indicates that the installation helpers were not dependent on Gill for continued flooring installation work. As to the third factor, the Department found that Updyke contacted the installation helpers as needed. Thus, the installation helpers were hired on a job-to-job basis.
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26 A.3d 567, 2011 Pa. Commw. LEXIS 381, 2011 WL 3369541, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gill-v-department-of-labor-industry-office-of-unemployment-compensation-pacommwct-2011.