Opinion
No. 1079 C.D. 2011
07-03-2012
Sunrise Restoration, Inc., Petitioner v. Unemployment Compensation Board of Review, Respondent
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
This case was assigned to the opinion writer on or before January 6, 2012, when President Judge Leadbetter completed her term as President Judge.
Sunrise Restoration, Inc. (Employer) petitions for review of the May 17, 2011, order of the Unemployment Compensation Board of Review (Board) affirming a referee's decision to award unemployment compensation benefits to Nick D. Richardson (Claimant). For the reasons that follow, we affirm.
The facts of this case, as found by the Board, are as follows:
1. The claimant last worked for Sunrise Restoration as a laborer from October 5, 2010. His last day of work was February 11, 2011.
2. The employer is a company engaged in the installation and weatherization of residential properties.
3. The claimant was scheduled to work for the employer Monday through Friday, 7:00 a.m. until the work was done.(Board's op. at 1-2.)
4. The employer required the claimant to report to the employer's office each morning to receive his job assignment.
5. If there was no work, the claimant would be sent home.
6. The claimant could not refuse an assignment.
7. The employer required the claimant to report back to the employer's office at the end of each day.
8. The claimant was prohibited from working for any other employer when scheduled to work for the employer.
9. The foreman on the job site, a subcontractor for the employer, would direct the claimant's work throughout the day.
10. The claimant supplied his own general tools. The employer provided the more expensive and specialized tools.
11. The employer required the claimant to obtain weatherization certification.
12. The employer paid the claimant $14 per hour, which was set by the employer.
13. Taxes were not taken from the claimant's pay.
14. On January 5, 2011, the claimant signed a subcontractor agreement, retroactive to October 5, 2010.
15. On February 15, 2011, the employer terminated the claimant's employment.
16. The claimant did not report his earnings with the employer to the Department.
Upon his separation from employment, Claimant applied for unemployment compensation benefits, which the local service center granted. Employer appealed on the basis that Claimant was self-employed and therefore ineligible for benefits under section 402(h) of the Unemployment Compensation Law (Law). After a hearing on the matter, the referee affirmed the local service center and awarded benefits. The Board affirmed the referee's decision.
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §802(h). This section of the Law provides that, with certain exceptions not relevant here, persons are ineligible for unemployment compensation for any week in which they are engaged in self-employment. The Law does not define the term "self-employment." Beacon Flag Car Co. v. Unemployment Compensation Board of Review, 910 A.2d 103 (Pa. Cmwlth. 2006). However, the courts have consistently found that independent contractors are to be considered "self-employed." Id.
On appeal to this Court, Employer first argues that the Board erred in concluding that Claimant was an employee rather than an independent contractor because "Claimant failed to present evidence demonstrating that he was under the control of Sunrise Restoration." (Employer's brief at 10.) We disagree.
Our scope of review is limited to determining whether constitutional rights were violated, an error of law was committed, or findings of fact are unsupported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S. §704. --------
Initially, we note that Employer incorrectly asserts that Claimant had the burden of proving that he was an employee. To the contrary, an individual is presumed to be an employee rather than an independent contractor, and the employer has the burden of proving otherwise. Thomas Edison State College v. Unemployment Compensation Board of Review, 980 A.2d 736, 741 (Pa. Cmwlth. 2009).
Section 4(l)(2)(B) of the Law sets forth the following two-pronged test for determining whether a person is a self-employed independent contractor or an employee. Specifically, this section provides that:
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.43 P.S. §753(l)(2)(B).
Under the first prong of the test provided for in section 4(l)(2)(B) of the Law, the proper inquiry is whether Claimant was free from control or direction over the performance of his or her work. In the course of determining whether persons are free from control or direction over their work, this court has considered various factors, such as 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 claimant's pay. No one factor is determinative. Rather, the totality of the circumstances must be considered.Hartman v. Unemployment Compensation Board of Review, 39 A.3d 507, 512 (Pa. Cmwlth. 2012) (citations omitted).
Here, the Board found that Claimant was required to obtain training, the more expensive and specialized tools were provided by Employer, Claimant had to report to Employer's place of business at the beginning and end of each day, Claimant could not refuse an assignment, Claimant was paid at a fixed hourly rate, Claimant was prohibited from working for any other employer when scheduled to work for Employer, and Claimant was directed by Employer's foreman on the job site throughout the day. (Findings of Fact, Nos. 6-12.) We agree with the Board that, under a totality of the circumstances analysis, Claimant was not free from direction or control over his work and, therefore, was an employee rather than an independent contractor. Because Employer did not establish the first prong of the conjunctive test set forth in section 4(l)(2)(B) of the Law, we need not inquire whether Claimant's services are the type performed in an independent trade or business.
The fact that Employer had Claimant sign a retroactive "subcontractor agreement" and did not deduct taxes from Claimant's wages does not change our analysis. It is the Law that determines a claimant's eligibility for unemployment compensation, not the intent of the parties or the terminology they use to describe their relationship. Hartman (holding that the claimant was an employee even though he considered himself an independent contractor and once declined an offer by the employer to become an "employee"). See also Pitt Chemical and Sanitary Supply v. Unemployment Compensation Board of Review, 9 A.3d 274 (Pa. Cmwlth. 2010) (holding that employers and employees may not alter an employee's right to unemployment compensation benefits by contract).
Employer also contends that the Board failed to consider evidence related to prior misrepresentations allegedly made by Claimant to the local service center. (Employer's brief at 12.) However, this argument is not included in Employer's Statement of the Issues in its brief and is therefore waived. Pa. R.A.P. 2116 (stating that "[n]o question will be considered unless it is stated in the statement of questions involved or is fairly suggested thereby.")
Accordingly, we affirm.
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 3rd day of July, 2012, the May 17, 2011, order of the Unemployment Compensation Board of Review is hereby affirmed.
/s/_________
PATRICIA A. McCULLOUGH, Judge