STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)
ALL PAYMENTS NEW YORK INC,
UNEMPLOYMENT INSURANCE CONTRIBUTION DECISION
Account No. 012138, Hearing No. S9800208MD
An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own, except that it makes the following modifications:
The second and third paragraphs of the Appeal Tribunal's Findings of Fact and Conclusions of Law are deleted and the following is substituted therefor:
"Wisconsin Statute § 108.065 provides,
108.065 DETERMINATION OF EMPLOYER. (1) An employe service company is the employer of an individual who the company engages in employment to perform services for a client or customer of the company.
If Wis. Stat. § 108.065(1) applies, a company like All Payments can be the employer of individuals performing services for its client-companies (so those client-companies do not have to deal with UI, etc.). However, in order for Wis. Stat. § 108.065(1) to apply, a company like All Payments must actually be an employe service company under Wisconsin UI Law. Accordingly, the statutory definition of "employe service company" becomes dispositive. The definition is in Wis. Stat. § 108.02(12m), a provision that lists five criteria. All of those five criteria must be met in order for a company like All Payments to be treated as an employe service company and, therefore, the employer, for Wisconsin UI purposes, of individuals who perform services for the company's client-companies."
The decision of the administrative law judge, as modified, is affirmed. The appellant is not an employe service company within the definition provided at Wis. Stat. § 108.02(12m). Wis. Stat. § 108.065(1) is therefore inapplicable. The Appellant is not the employer, under Wisconsin Unemployment Insurance Law, of workers who perform services for the appellant's client- companies, notwithstanding the contracts between appellant and its client-companies. Accordingly, such workers cannot be reported by appellant as employes of appellant.
Dated and mailed January 13, 2000
allpmts.smd : 200 : 7 EE 409 ER 460 ER 464
/s/ David B. Falstad, Chairman
/s/ Pamela I. Anderson, Commissioner
/s/ James A. Rutkowski, Commissioner
The initial presumption, as correctly identified by the administrative law judge, is that the entity for which a worker performs services is the employer of that worker, regardless of which entity issues the worker's paycheck. The presumption is embodied in Wis. Stat. § 108.02(12)(a).
In many cases, a business entity that pays workers for a particular kind of work will seek a determination that the workers perform the services in issue as independent contractors, and therefore not as employes, for Wisconsin Unemployment Insurance purposes. Such cases are resolved under Wis. Stat. § 108.02(12)(b).
In the instant case, All Payments is not alleging that the workers in issue are independent contractors. It was undisputed by the parties to these proceedings that the workers in issue performed their services as employes for Wisconsin Unemployment Insurance purposes. Indeed, All Payments wants to be determined to be the employer of the workers in issue. All Payments desires that result because its business is to provide services to media production companies. Specifically, All Payments enters contracts with its client-companies whereunder All Payments agrees to pay workers who perform certain services for the client-companies, and to act as the "employer" of those workers for purposes of, inter alia, reporting wages and paying Unemployment Compensation taxes.
The commission has modified the appeal tribunal decision to expressly include the necessary finding that Wis. Stat. § 108.065(1) was inapplicable to the undisputed relevant facts in this case.
Application of Wis. Stat. § 108.065(1) is the mechanism by which an entity that has been shown to be an "Employe service company" is deemed to be the employer. Stated otherwise, Wis. Stat. § 108.065(1) is the statute that, if applicable, would overcome the statutory presumption that All Payments' client-companies are the employers of the workers in issue.
In order for Wis. Stat. § 108.065(1) to apply, All Payments had the burden of showing that it was an "Employe service company" under Wis. Stat. § 108.02(12m) when the services here in issue were performed.
The commission agrees with the administrative law judge's application of Wis. Stat. § 108.02(12m) to the facts of this case. All Payments met only one of the five conjunctive criteria in the definition, in that All Payments did pay the workers in issue, as required by Wis. Stat. § 108.02(12m)(d). Since only one of the five conjunctive criteria was met, All Payments did not meet its burden of showing that it was an "Employe service company" for Wisconsin Unemployment Insurance purposes.
cc: ATTORNEY ERIC CAPOGROSSO
JACOBY & CAPOGROSSO
ATTORNEY JORGE L FUENTES
[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]