Opinion
No. 1126 C.D. 2013
02-11-2014
Principle Diversified Business Group, Petitioner v. Unemployment Compensation Board of Review, Respondent
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY PRESIDENT JUDGE PELLEGRINI
Principle Diversified Business Group (Principle Diversified) petitions for review from an order of the Unemployment Compensation Board of Review (Board) affirming the Referee's decision finding that Ann M. Porter (Claimant) was not ineligible for emergency unemployment compensation (EUC) benefits pursuant to Section 402(h) of the Unemployment Compensation Law (Law) and Section 4001 of Title IV of the Emergency Unemployment Compensation Act of 2008 (EUC Act) for compensable weeks ending September 15, 2012, through December 22, 2012, because Employer failed to establish that Claimant was customarily engaged in an independently established trade, occupation, profession or business. For the reasons that follow, we affirm.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §802(h). That section provides that "[a]n employe shall be ineligible for compensation for any week ... [i]n which he is engaged in self-employment." Although the Law does not define "self-employment," our courts utilize Section 4(l)(2)(B) of the Law, 43 P.S. §753(l)(2)(B), to fill the void because its obvious purpose is to exclude independent contractors from coverage. SkyHawke Technologies, LLC v. Unemployment Compensation Board of Review, 27 A.3d 1050, 1053 (Pa. Cmwlth. 2011). Section 4(l)(2)(B) of the Law 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.
Title IV of the Supplemental Appropriation Act of 2008, Pub. Law 110-252, 122 Stat. 2323, 26 U.S.C. §3304 note. Section 4001(b) of the EUC Act provides, in relevant part, that a:
"State agency ... will make payments of emergency unemployment compensation to individuals who—
"(1) have exhausted all rights to regular compensation under the State law or under Federal law with respect to a benefit year (excluding any benefit year that ended before May 1, 2007);
"(2) have no rights to regular compensation with respect to a week under such law or any other State unemployment compensation law or to compensation under any other Federal law;
"(3) are not receiving compensation with respect to such week under the unemployment compensation law of Canada; and
"(4) are able to work, available to work, and actively seeking work.
Claimant had been receiving regular unemployment compensation benefits. In August 2012, Claimant entered into an independent contractor agreement with Principle Diversified. Pursuant to the agreement, Principle Diversified sent Claimant audio files via email which Claimant would transcribe and send back to Principle Diversified. Principle Diversified provided Claimant with instructions on how to format the files and set deadlines for completion of the work. Claimant was free to accept or reject any assignment, perform all her work from home, set her own work hours, was not required to attend employee meetings or functions, and could work for any other employer performing the same type of work. Claimant performed transcription services for Principle Diversified from August 2012 to September 2012 and earned a total of $28 from her work.
Sometime after September 2012, Claimant filed for EUC benefits. Principle Diversified opposed the application on the grounds that Claimant was ineligible for benefits as an independent contractor. The UC Service Center, finding that Claimant was not self-employed because she was not free from direction or control in the performance of her job, issued a determination that she was not ineligible for benefits under Section 402(h) of the Law, which Principle Diversified appealed. Before the Referee, Claimant testified that she signed an independent contractor agreement and that she indicated on the Claimant Questionnaire that she considered herself an independent contractor. However, Claimant testified that prior to her work for Principle Diversified, she was not engaged in an independent typing business and had no previous experience in that capacity, explaining "I was trying to learn a new skill so I could supplement and get off of unemployment." (March 22, 2013 Hearing Transcript at 14).
Principle Diversified's Office Manager, Rachel Cable, also testified as to the nature of Claimant's employment relationship with Employer.
Noting that "no reasonable person could construe that a person receiving total earnings of $28 over a four to five-week period" is engaged in an independently established trade, occupation, profession or business, the Referee concluded that Claimant was not self-employed and, therefore, not ineligible for benefits under Section 402(h) of the Law for the claim weeks at issue. (Referee's April 10, 2013 Decision at 2). Principle Diversified appealed to the Board, which made its own findings of fact and affirmed the Referee's decision. The Board explained that "[a]lthough the claimant was free to work for other employers performing the same type of work, there is no evidence that the claimant did so either before or after her employment with the employer. The claimant did not hold herself out as a transcriptionist for hire. The claimant's work with the employer is sporadic. The claimant is not self-employed." (Board's June 4, 2013 Decision at 3). Principle Diversified then filed this appeal, in which it argues that the Board's determination that Claimant was not an independent contractor was not based on substantial evidence.
Our review of the Board's decision is limited to determining whether constitutional rights were violated, whether an error of law was committed, or whether necessary findings of fact were supported by substantial evidence. Middletown Township v. Unemployment Compensation Board of Review, 40 A.3d 217, 223 n.8 (Pa. Cmwlth. 2012).
"Generally, there is a presumption in the Law that an individual receiving wages is an employee and not an independent contractor engaged in self-employment." Pasour v. Unemployment Compensation Board of Review, 54 A.3d 134, 137 (Pa. Cmwlth. 2012). However, an employer can overcome this presumption by establishing that the claimant was: (1) free from control and direction in the performance of his service; and (2) customarily engaged in an independent trade or business as to that service. Id. "Unless both of those showings are made, the presumption stands that one who performs services for wages is an employee." Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593, 596 (Pa. Cmwlth. 2012). Whether a claimant was an employee or an independent contractor under Section 4(l)(2)(B) is a question of law subject to our review. Pasour, 54 A.3d at 137.
Because there is no dispute that Claimant was free from Principle Diversified's control and direction, we only have to determine whether the Board erred in finding that Claimant was not customarily engaged in an independent trade or business. In making that determination, courts have generally considered: (1) whether the individual was capable of performing the activities in question to anyone who wished to avail themselves of the services and was not compelled to look to only a single employer for the continuation of such services; (2) whether the individual was dependent on the presumed employer for employment; and (3) whether the individual was hired on a job-to-job basis and could refuse any assignment. Osborne Associates, Inc. v. Unemployment Compensation Board of Review, 3 A.3d 722, 728 (Pa. Cmwlth. 2010). Nonetheless, we have held that a claimant who is already receiving benefits is not disqualified as an independent contractor because the claimant subsequently accepts an occasional work offer on an as-needed basis. See Minelli, 39 A.3d at 598 (claimant receiving benefits not disqualified by performing 22 hours of consulting work over a three-day period); Silver v. Unemployment Compensation Board of Review, 34 A.3d 893, 897-98 (Pa. Cmwlth. 2011) (claimant receiving benefits not disqualified by performing consulting work as a non-agent independent contractor for a total of three hours over course of five months).
Here, the Board found as fact that Claimant worked for Principle Diversified for approximately one month, during which time she earned $28, and that she had not previously performed transcription work. As in Minelli and Silver, Claimant's sporadic work for Principle Diversified is simply not sufficient to establish that she was customarily engaged in an independently established trade or business and, thus, disqualified for benefits under Section 4(l)(2)(B) of the Law. Therefore, Claimant is not ineligible for EUC benefits for the compensable weeks ending September 15, 2012, through December 22, 2012.
Accordingly, the order of the Board is affirmed.
The remedy for Employer in this case is to seek relief from charges under Section 302.1 of the Law, added by the Act of June 17, 2011, P.L. 16, 43 P.S. §782.1. --------
/s/_________
DAN PELLEGRINI, President Judge ORDER
AND NOW, this 11th day of February, 2014, the order of the Unemployment Compensation Board of Review, dated June 4, 2013, at No. B-552426, is affirmed.
/s/_________
DAN PELLEGRINI, President Judge
Section 4001(d)(2) provides, in relevant part, that "[t]he terms and conditions of the State law which apply to claims for regular compensation and to the payment thereof (including terms and conditions relating to availability for work, active search for work, and refusal to accept work) shall apply to claims for emergency unemployment compensation and the payment thereof..."