David M. Glover, Judge.
Appellant, Mamo Transportation, Inc., appeals the Board of Review’s decision that it is required to pay unemployment taxes on the drivers it engages because it failed to meet the three-prong test set forth in Arkansas Code Annotated section ll-10-210(e) to determine if its drivers are independent contractors. The Board of Review found that Mamo met the first prong but did not meet the second prong, and because of that it was unnecessary to address the third prong. On appeal, Mamo argues that it met the criteria of the second prong. We affirm the Board of Review’s determination that Mamo did not meet the second prong and is therefore hable for payment of unemployment taxes.
Arkansas Code Annotated section ll-10-210(e) (Supp. 2005) provides:
(e) Service performed by an individual for wages shall be deemed to be employment subject to this chapter irrespective of whether the common law relationship of master and servant exists, unless and until it is shown to the satisfaction of the director that:
(1)Such individual has been and will continue to be free from control and direction in connection with the performance of the service, both under his or her contract for the performance of service and in fact; and
(2)The service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed; and
(3)The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.
Overview
Mamo provides “drive-away” services for its customers throughout all forty-eight contiguous states and into Canada. Mamo contracts with drivers to deliver large vehicles to its customers, i.e., tractor-trailers, buses, and motor homes, where conventional hauling is not financially efficient. Mamo, which is headquartered in Indiana and has dispatch offices in Indiana, Pennsylvania, North Carolina, and Arkansas, has a list of approved drivers. An approved driver calls one of the dispatch offices when he wants to work to determine if there is a trip he wants to take. Mamo gives the driver the amount it is willing to pay per mile for the trip, and the driver is free to attempt to negotiate a better deal. If the driver and Mamo are able to agree on a price, the driver makes the trip. Mamo’s profits are derived from the difference between what the customer pays Mamo and what Mamo pays the driver. Mamo does not have exclusive contracts with any driver; testimony indicated that eighty-eight percent of the drivers had at least two other carrier contracts in addition to Mamo. There was testimony that Mamo does not train its drivers; that the drivers are responsible for paying their own taxes; that the drivers pay their own expenses, including meals, lodging, fuel for the vehicle being delivered, and transportation home after delivery; that drivers choose how much to work; and that drivers are responsible for the first $1000 in damages if there is an accident, with Mamo’s liability insurance paying the balance owed. Three Mamo drivers testified that they considered themselves to be independent contractors.
Case History
This case arose when one of Mamo’s drivers, Sylvia Jones-Alien, filed for unemployment benefits after Mamo cancelled her contract on the basis that she was a high-risk driver. Jones-Alien was making her third trip for Mamo during her first ninety days under contract when she caused over $9,000 in damages to a vehicle by driving it under a bridge that was too low for the vehicle. When she applied for unemployment benefits, Jones-Alien identified herself as an independent contractor. Mamo agreed with this designation. However, the Board of Review found that Mamo was not exempt from paying Arkansas unemployment taxes because it did not meet all three prongs of Arkansas Code Annotated section ll-10-210(e). Mamo now brings this appeal.
Discussion
In American Transportation Corporation v. Director, 39 Ark. App. 104, 106, 840 S.W.2d 198, 199 (1992) (citations omitted), our court held:
In order to obtain the exemption contained in the Act, it is necessary that the employer show to the satisfaction of the Director that the requirements of all three subsections have been met. Therefore, if there is sufficient evidence to support a finding that any one of the three requirements were not met, the case must be affirmed. In reviewing decisions of the Board of Review, this court views the evidence in the fight most favorable to the Board’s findings, giving them the benefit of every legitimate inference that can be drawn from the testimony, and will affirm the determination of the Board if its findings are supported by substantial evidence. The issue to determine is not whether the evidence would support some different finding, but whether it supports the finding actually reached by the Board.
In the present case, Mamo does not make the argument that its drivers are not paid wages; therefore, the only issue on appeal is whether Mamo meets the second prong of section ll-10-210(e), whether the service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed. This second prong itself is a two-part alternative test — the test is met if the service is performed either outside the usual course of business or if the service is performed outside of all the places of business of the enterprise for which the service is performed.
In Home Care Professionals of Arkansas, Inc. v. Williams, 95 Ark. App. 194, 235 S.W.3d 536 (2006), this court held that the appellant, HCP, was not exempt from paying unemployment taxes because it had failed to satisfy subparagraph two of the statutory exemption. HCP maintained a list of caregivers who provided home-care services for the elderly; when it first began, HCP provided direct home-care services for the elderly, but it had eventually evolved into a home-care referral service. Clients contacted HCP and stated what home-care services were needed; HCP collected a fee for the service up front and then found a caregiver willing to perform the necessary services. The client and caregiver negotiated a schedule and the terms of employment; once the caregiver completed the services and turned in a time sheet, HCP distributed the funds collected from the client less its forty percent referral fee. Caregivers on HCP’s referral list signed independent-contractor agreements with HCP, and caregivers were responsible for their own transportation and supplies. After a schedule was arranged between the client and the caregiver, HCP administered the schedule, including scheduling replacements if the caregiver was unable to work. HCP’s caregivers were not required to be exclusively listed with HCP.
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David M. Glover, Judge.
Appellant, Mamo Transportation, Inc., appeals the Board of Review’s decision that it is required to pay unemployment taxes on the drivers it engages because it failed to meet the three-prong test set forth in Arkansas Code Annotated section ll-10-210(e) to determine if its drivers are independent contractors. The Board of Review found that Mamo met the first prong but did not meet the second prong, and because of that it was unnecessary to address the third prong. On appeal, Mamo argues that it met the criteria of the second prong. We affirm the Board of Review’s determination that Mamo did not meet the second prong and is therefore hable for payment of unemployment taxes.
Arkansas Code Annotated section ll-10-210(e) (Supp. 2005) provides:
(e) Service performed by an individual for wages shall be deemed to be employment subject to this chapter irrespective of whether the common law relationship of master and servant exists, unless and until it is shown to the satisfaction of the director that:
(1)Such individual has been and will continue to be free from control and direction in connection with the performance of the service, both under his or her contract for the performance of service and in fact; and
(2)The service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed; and
(3)The individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.
Overview
Mamo provides “drive-away” services for its customers throughout all forty-eight contiguous states and into Canada. Mamo contracts with drivers to deliver large vehicles to its customers, i.e., tractor-trailers, buses, and motor homes, where conventional hauling is not financially efficient. Mamo, which is headquartered in Indiana and has dispatch offices in Indiana, Pennsylvania, North Carolina, and Arkansas, has a list of approved drivers. An approved driver calls one of the dispatch offices when he wants to work to determine if there is a trip he wants to take. Mamo gives the driver the amount it is willing to pay per mile for the trip, and the driver is free to attempt to negotiate a better deal. If the driver and Mamo are able to agree on a price, the driver makes the trip. Mamo’s profits are derived from the difference between what the customer pays Mamo and what Mamo pays the driver. Mamo does not have exclusive contracts with any driver; testimony indicated that eighty-eight percent of the drivers had at least two other carrier contracts in addition to Mamo. There was testimony that Mamo does not train its drivers; that the drivers are responsible for paying their own taxes; that the drivers pay their own expenses, including meals, lodging, fuel for the vehicle being delivered, and transportation home after delivery; that drivers choose how much to work; and that drivers are responsible for the first $1000 in damages if there is an accident, with Mamo’s liability insurance paying the balance owed. Three Mamo drivers testified that they considered themselves to be independent contractors.
Case History
This case arose when one of Mamo’s drivers, Sylvia Jones-Alien, filed for unemployment benefits after Mamo cancelled her contract on the basis that she was a high-risk driver. Jones-Alien was making her third trip for Mamo during her first ninety days under contract when she caused over $9,000 in damages to a vehicle by driving it under a bridge that was too low for the vehicle. When she applied for unemployment benefits, Jones-Alien identified herself as an independent contractor. Mamo agreed with this designation. However, the Board of Review found that Mamo was not exempt from paying Arkansas unemployment taxes because it did not meet all three prongs of Arkansas Code Annotated section ll-10-210(e). Mamo now brings this appeal.
Discussion
In American Transportation Corporation v. Director, 39 Ark. App. 104, 106, 840 S.W.2d 198, 199 (1992) (citations omitted), our court held:
In order to obtain the exemption contained in the Act, it is necessary that the employer show to the satisfaction of the Director that the requirements of all three subsections have been met. Therefore, if there is sufficient evidence to support a finding that any one of the three requirements were not met, the case must be affirmed. In reviewing decisions of the Board of Review, this court views the evidence in the fight most favorable to the Board’s findings, giving them the benefit of every legitimate inference that can be drawn from the testimony, and will affirm the determination of the Board if its findings are supported by substantial evidence. The issue to determine is not whether the evidence would support some different finding, but whether it supports the finding actually reached by the Board.
In the present case, Mamo does not make the argument that its drivers are not paid wages; therefore, the only issue on appeal is whether Mamo meets the second prong of section ll-10-210(e), whether the service is performed either outside the usual course of the business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed. This second prong itself is a two-part alternative test — the test is met if the service is performed either outside the usual course of business or if the service is performed outside of all the places of business of the enterprise for which the service is performed.
In Home Care Professionals of Arkansas, Inc. v. Williams, 95 Ark. App. 194, 235 S.W.3d 536 (2006), this court held that the appellant, HCP, was not exempt from paying unemployment taxes because it had failed to satisfy subparagraph two of the statutory exemption. HCP maintained a list of caregivers who provided home-care services for the elderly; when it first began, HCP provided direct home-care services for the elderly, but it had eventually evolved into a home-care referral service. Clients contacted HCP and stated what home-care services were needed; HCP collected a fee for the service up front and then found a caregiver willing to perform the necessary services. The client and caregiver negotiated a schedule and the terms of employment; once the caregiver completed the services and turned in a time sheet, HCP distributed the funds collected from the client less its forty percent referral fee. Caregivers on HCP’s referral list signed independent-contractor agreements with HCP, and caregivers were responsible for their own transportation and supplies. After a schedule was arranged between the client and the caregiver, HCP administered the schedule, including scheduling replacements if the caregiver was unable to work. HCP’s caregivers were not required to be exclusively listed with HCP.
This court, in affirming the Board’s decision that HCP had failed to meet the second prong of the independent-contractor test, quoted the Board’s analysis of the second prong of that test:
In the instant case, caring for the elderly is necessary to [HCP’s] business, and thus providing in-home services is within [HCP’s] usual course of business. Since the evidence does not establish that [HCP] receives a monetary benefit when a simple refenal is made, but only when a service by a caregiver is performed for a client, a finding that providing in-home services is within [HCP’s] usual course of business is particularly appropriate.
In regard to the place of business aspect of the second part of the test, an employer’s place of business has been found to include not only the location of a business’s office, but also the entire area in which a business conducts business. See Missouri Association of Realtors v. Division of Employment Security, 761 S.W.2d 660 (Mo. App. 1988); Employment Security Commission of Wyoming v. Laramie Cabs, Inc., 700 P.2d 399 (Wyo. 1985); and Vermont Institute of Community Involvement, Inc., v. Department of Employment Security, 436 A.2d 765 (Vt. 1981). More specifically, the representation of an entity’s interest by an individual of a premises renders the premises a place of the employer’s business. See Carpetland, [Carpetland U.S.A. v. Illinois Dep’t of Employment Security, 206 Ill. 351, 776 N.E.2d 166 (Ill. 2002)]. In the instant case, the caregivers represent [HCP’s] interest on the client’s premises, not just in a tangential fashion, (e.g., satisfactory work by the caregiver may result in future referral), but in the most direct sense, that of performing the very service by which [HCP] profits.
95 Ark. App. at 198-99, 235 S.W.3d at 540-41. The Board determined that the caregivers represented HCP’s interest on the clients’ premises, thereby making the clients’ premises a place of business. This court adopted that determination.
Other jurisdictions have reached the same conclusion. In O’Hare-Midway Limousine Service, Inc. v. Baker, 596 N.E. 2d 795 (1992), the Appellate Court of Illinois rejected O’Hare-Midway’s argument that the limousine drivers performed their work outside its usual course of business. The appellate court held that while the driving did not take place at the office, the usual course of a limousine dispatching service was not limited to office space and because the drivers represented the interests of O’Hare-Midway whenever they picked up passengers, the usual course of business was on the roadways traveled. (Emphasis added.) Likewise, in Employment Security Commission of Wyoming v. Laramie Cabs, Inc., 700 P.2d 399 (1985), cited in Home Care Professionals, supra, the Supreme Court of Wyoming held that the essence of the taxi cab business was conducted in cabs between the customer’s origin and destination, not in the company office, and the supreme court concluded that the vehicles that provided the service had to be considered a place of business of the taxicab company. The Supreme Court of North Dakota determined in Midwest Property Recovery, Inc. v. Job Service of North Dakota, 475 N.W.2d 918 (1991), that “the places of enterprise” of Midwest, who was in the business of repossessing vehicles, necessarily extended to where the repossessions took place.
In the present case giving the statutory language its plain meaning and viewing the evidence in the light most favorable to the Board’s findings, we hold that the Board’s decision is supported by substantial evidence. Mamo provides drivers to transport vehicles for its customers. As in Home Care Professionals, supra, Mamo does not receive a monetary benefit until the service, here, driving and delivering the vehicle, is performed; therefore, such delivery is in the usual course of business. Regarding the “place of business” aspect of the test, by comparison to O’Hare-Midway Limousine, supra, and Laramie Cabs, supra, the roadways are where services are performed, and the drivers represent Mamo’s interests on those roadways.
Affirmed.
Pittman, C.J., Griffen, and Marshall, JJ., agree. Hart and Miller, JJ., dissent.