Opinion
No. 75 C.D. 2012
09-20-2012
Ida Boulanger, Petitioner v. Unemployment Compensation Board of Review, Respondent
BEFORE: HONORABLE DAN R. PELLEGRINI, President Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY SENIOR JUDGE FRIEDMAN
Ida Boulanger (Claimant) petitions for review of the December 22, 2011, order of the Unemployment Compensation Board of Review (UCBR), which affirmed the decision of a referee finding Claimant ineligible for benefits pursuant to sections 402(h) and 4(l)(2)(B) of the Unemployment Compensation Law (Law) because Claimant was self-employed. We reverse.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §§802(h), 753(l)(2)(B).
The UCBR found as follows. Claimant was employed by Crown Cork and Seal (Crown) as a full-time customer service administrator from May 1996 until her last day of work in April 2011. Claimant subsequently sought alternate employment. Geneva Worldwide, Inc. (Employer) offered Claimant one day of work as a translator/interpreter. Claimant and Employer entered into a Freelance Translator/Interpreter Work Agreement, which provided that Claimant would work as an independent contractor and that Claimant's compensation would be limited to the payment for services provided. Employer provided no benefits in addition to the monetary compensation and did not withhold any taxes from Claimant's compensation. (UCBR's Findings of Fact, Nos. 1-8.)
Claimant's separation from employment is not at issue in this appeal. Claimant applied for unemployment compensation on April 24, 2011, which the local service center granted.
Claimant's rate of pay was $40.00 per hour as negotiated for the assignment. Claimant was not required to accept any work from Employer; Employer was not obligated to offer any work to Claimant. Employer paid Claimant based upon invoices submitted to Employer. Employer did not train Claimant and did not require Claimant to attend any meetings or provide any reports. Employer did not supervise Claimant's work. Claimant could begin and end the job independently. Claimant was free from direction and control in the performance of her services. Claimant purchased her own supplies. Claimant is able to perform identical services for other employers independently. Claimant performs freelance translation work while seeking full-time employment. Claimant did not perform any translation work for compensation while employed by Crown. (UCBR's Findings of Fact, Nos. 10-22.)
Claimant reported earnings from the translation work she performed for Employer to the unemployment compensation authorities. The local service center determined that Claimant remained eligible for benefits under section 402(h) of the Law. Employer appealed. Following a hearing, the referee reversed and denied Claimant unemployment compensation benefits. Claimant then appealed to the UCBR. The UCBR concluded that Claimant was ineligible for unemployment compensation benefits pursuant to sections 402(h) and 4(l)(2)(B) of the Law because she was engaged in self-employment. Claimant now petitions this court for review of the UCBR's decision.
Because Claimant was eligible for and actually receiving benefits following her separation from Crown, the issue was not whether the assignment for Employer itself would entitle Claimant to benefits, but whether it would disqualify her from further receipt of the benefits she was already receiving.
The UCBR recognizes that it erroneously referred to Starinieri v. Unemployment Compensation Board of Review, 447 Pa. 256, 289 A.2d 726 (1972), in its decision and concedes that the holding in Starinieri has no bearing on this case. (UCBR's Br. at 8 n.7.)
Our scope of review is limited to determining whether constitutional rights were violated, whether the adjudication is in accordance with the law and whether the necessary findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S. §704.
On appeal, Claimant argues that the UCBR erred as a matter of law by finding that Claimant's translation work disqualified her from further receipt of unemployment compensation benefits. We agree.
Section 402(h) of the Law, 43 P.S. §802(h), provides that an employee "shall be in ineligible for compensation for any week . . . [i]n which he is engaged in self-employment." Section 402(h) (emphasis added) continues:
Provided, however, That an employe who is able and available for full-time work shall be deemed not engaged in self-employment by reason of continued participation without substantial change during a period of unemployment in any activity . . . undertaken while customarily employed by an employer in full-time work whether or not such work is in "employment" as defined in this act and continued subsequent to separation from such work when such activity is not engaged in as a primary source of livelihood. Net earnings received by the employe with respect to such activity shall be deemed remuneration paid or payable with respect to such period as shall be determined by rules and regulations of the department.Although the term "self-employment" is not defined by the Law, the term "employment" is defined as follows:
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 [her] 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.Section 4(l)(2)(B) of the Law, 43 P.S. §753(l)(2)(B). The courts of this Commonwealth have relied upon Section 4(l)(2)(B)'s definition of "employment" in ascertaining whether or not a person is self-employed. Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593, 595 (Pa. Cmwlth. 2012) (en banc); Silver v. Unemployment Compensation Board of Review, 34 A.3d 893, 896 (Pa. Cmwlth. 2011). There is a presumption that an individual is an employee. Minelli, 39 A.3d at 596. This presumption may be overcome only if the employer meets both elements of section 4(l)(2)(B) of the Law. Id.
In Silver, the claimant, who was receiving unemployment compensation following the separation from employment, accepted four telephone consultation assignments. 34 A.3d at 894. The claimant set her own hours and rate of pay, worked from home and was under no obligation to accept any assignments. Id. The UCBR determined that the claimant was self-employed and, thus, ineligible for benefits under section 402(h) of the Law. Id. at 895-896. On appeal, we determined that the claimant did not meet the threshold test for self-employment. Although the claimant operated free from direction and control over the performance of such services, we determined that the claimant was not "customarily engaged" in that profession because the claimant only provided telephone consultation services for three hours over the course of five months. Id. at 897. We determined that such activity was "de minimis and insufficient to demonstrate that she is customarily engaged in an independently established trade, occupation, profession or business." Id. "[T]he fact that an unemployed person agrees to accept, and thereafter does accept, an occasional offer of work is simply not enough to demonstrate that said individual is customarily engaged in an independently established trade, occupation, profession or business." Id. at 898. Because both elements of section 4(l)(2)(B) of the Law were not met, we reversed. Id. at 899.
Even if both elements of section 4(l)(2)(B) of the Law are satisfied, a person will not be ineligible for benefits if the "sideline" exception set forth in section 402(h) is met. That is, an employee shall be deemed not engaged in self-employment if:
(1) the self-employment began prior to the termination of the employee's full-time employment; (2) the self-employment continued without substantial change after the termination; (3) the employee remained available for full-time employment; and (4) the self-employment was not the primary source of the employee's livelihood.Kress v. Unemployment Compensation Board of Review, 23 A.3d 632, 636 (Pa. Cmwlth. 2011) (citation omitted), appeal denied, ___Pa. ___, 47 A.3d 849 (2012). It is the claimant's burden to show that his or her sideline activity is non-disqualifying under section 402(h). Id.
Here, following her separation from employment as a customer service administrator with Crown, Claimant supplemented her income by providing translator/interpreter services. Although Claimant operated free from direction and control over the performance of the translation services, Claimant was not "customarily engaged" in the occupation of translator. Claimant worked for Employer on one occasion for two hours at a rate of pay of $40.00, earning a total of $80.00. Claimant also provided translation services for another organization, Cristaldo Associates, Inc. (Cristaldo), on four occasions. (N.T., 9/23/2011, at 23; Certified Record, Item No. 1.) Claimant states in her brief that she received $782.20 from Cristaldo for work that took place over several weeks. (Claimant's Br. at 15.) This occasional and sporadic offer of work over a period of several weeks is de minimis and does not demonstrate that Claimant "is customarily engaged in an independently established trade, occupation, profession or business." Silver, 34 A.3d at 898.
Both the referee and the UCBR considered Claimant to be customarily engaged in an independently established trade because freelance translators and interpreters have long been considered independent professions, (Referee's Decision, 9/27/11, at 3), and the business is one which is customarily engaged in as an independent trade or business, (UCBR's Decision, 12/22/11, at 3). The proper inquiry is not just whether the profession is considered an independently established trade, occupation, profession or business, but whether the particular claimant is customarily engaged in such a profession. See Section 4(l)(2)(B) of the Law, 43 P.S. §753(l)(2)(B).
Moreover, even if we were to conclude that Claimant was self-employed pursuant to section 4(l)(2)(B) of the Law, Claimant's translation activity meets the sideline exception of section 402(h) of the Law. First, Claimant testified that she provided translation services prior to the termination of her employment with Crown, albeit not for compensation. (N.T., 9/23/2011, at 22.) Nevertheless, we have opined that "the fact that an activity which may generate a limited amount of income is not undertaken while a claimant is still employed does not automatically make it 'self-employment.'" Silver, 34 A.3d at 898 (quoting Teets v. Unemployment Compensation Board of Review, 615 A.2d 987, 989 (Pa. Cmwlth. 1992)). Second, following her separation from employment with Crown, Claimant provided her translation services on only five occasions over a several-week period for a reported sum of $862.00. In terms of money earned and the periodic nature of the translation assignments, this increase is not a substantial change. See Risse v. Unemployment Compensation Board of Review, 35 A.3d 79 (Pa. Cmwlth. 2012). Third, the sum of $862.20 earned over the course of several weeks can hardly be considered the primary source of Claimant's livelihood. Last, Claimant remains available for full-time employment and continues to seek full-time employment in her primary field of customer service. For these reasons, we conclude that Claimant is not ineligible under section 402(h) of the Law from receiving unemployment compensation benefits.
In Risse, the claimant increased his hours from zero hours worked in 2007 and 2008 to approximately ten hours per week; the claimant's wages likewise increased from $3,750.00 in 2009 to $8000.00 in 2010. "Even though those changes are substantial increases in percentage terms, in the amount of money earned, and the periodic nature of that employment, those increases are not substantial to establish that he was transitioning that sideline activity to full-time employment." 35 A.3d at 82. We concluded that the claimant's sideline business activity did not substantially change. Id. Accordingly, we held that the claimant was not ineligible under section 402(h) for unemployment compensation benefits. Id.
Next, Claimant argues that the UCBR erred in assessing a $5,055.00 overpayment against her. However, this issue was not raised before the UCBR in this appeal and is not properly before the court.
In her petition for appeal from the September 27, 2011, referee's decision, Claimant attached a copy of her appeal from a September 30, 2011, notice of determination, which found that Claimant received an overpayment of benefits. (Certified Record, Item No. 10.) However, Claimant's appeal from the overpayment determination is not a part of the instant appeal, which dealt only with the denial of unemployment compensation benefits. --------
Accordingly, we reverse the decision of the UCBR.
/s/_________
ROCHELLE S. FRIEDMAN, Senior Judge
ORDER
AND NOW, this 20th day of September, 2012, we reverse the December 22, 2011, order of the Unemployment Compensation Board of Review.
/s/_________
ROCHELLE S. FRIEDMAN, Senior Judge