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Part 1: Direction and Control Test (Case Studies)
The department has provided the following tools to assist you in determining if the worker is under the employer's direction and control:
- Cases studies relevant to direction and control based upon cases decided by the Labor and Industrial Review Commission (LIRC), Wisconsin Circuit Courts, and Wisconsin Appellate Courts
- Hyperlinks to the LIRC Decision Digest containing additional cases on direction and control for further reading and research.
Randy Eichman is well know within the emergency preparedness community and is highly regarded within this community as a trainer. The Wisconsin Technical College System Foundation (WTCS Foundation), a nonprofit 501(c) (3) organization, in serial contracts with Eichman, each covering a period of months, utilized his services to present emergency preparedness workshops to students and staff in public school districts. Eichman provided these services on an ad hoc basis during each contract period. During 2006, Eichman had contracts with entities other than the WTCS Foundation, including Rock, Dane, and Green Counties and the City of Whitewater, to provide emergency preparedness training.
The issue is whether Eichman provided the services for the WCTS Foundation as an employee or an independent contractor. One of the conditions that the WCTS Foundation had to prove to establish that Eichman was an independent contractor was that he was free of the direction and control of the WCTS Foundation.
LIRC found that Eichman was not subject to the foundation's direction or control. Once the foundation, after granting a school district's request, determined the date and location of the requested emergency preparedness workshop and made the related logistical arrangements, it offered the opportunity to present the workshop to qualified individuals, including the claimant. Eichman was free to accept or decline this opportunity; had input into the instructional curriculum, which was established by an entity other than the foundation, and had unfettered discretion to use whatever teaching methods he chose to present it; and the standards of behavior with which he was required to comply would be typical, whether stated or implicit, for those providing unsupervised classroom instruction to others whether as an employee or as an independent contractor.
In 1998, the Door County Department of Community Services hired two women to provide round the clock care for a cognitively disabled 63 year old woman. The County had the two women file an application to become an Adult Family Home in a condominium owned by a corporation formed by the family of the 63 year old woman. The County approved the application in October of 1998. Each caregiver was paid $2600.00 per month by the County. Both caregivers signed separate Admission and Rate Agreements with the County governing the details of the relationship between the caregivers and Door County and the nature of the care they were to provide to the 63 year old woman. These agreements were renewed annually with the two caregivers and their successors until May of 2003 when the County terminated the arrangement. The care givers filed for unemployment claiming they were employees of Door County. The County claimed they were independent contractors. One of the factors Door County had to satisfy to show the caregivers were independent contractors was that the caregivers were free from free from its direction and control.
The Labor and Industry Review Commission determined that the caregivers were not free from the County's direction and control.
The County had significant control over how the caregivers performed their services. All of the "Adult Family Home Certificates" issued by the County in this case stated that the home would be "under the supervision of" the County. The "Adult Family Home Memorandum of Agreement" covering the years at issue was by and between the caregivers and the County. Those agreements all contained detailed specifications of and expectations for the services to be provided by the caregivers. The County provided the caregivers with documents entitled "Roles and Responsibilities" and "Rights of Residents" which they described as defining what the responsibilities and expectations of an adult family home caregiver were. The documentary record and the testimony of the witnesses made it clear that the County exercised very significant control over exactly what services were provided by the caregivers and how those services were provided. The caregivers testified as to numerous indicia of control being exercised over them by the County: the requirement to file various kinds of reports, periodic inspection visits, periodic required meetings with County representatives, a requirement that use of any other individuals to cover their duties temporarily (respite care) be approved by the County, requirements that they take the disabled woman to certain specified activities, requirements that they obtain approval before taking her to other activities (approval that might not always be granted), a requirement applied to one of the caregivers that she participate in certain "care provider" training dictated by the County, and expectations communicated to them about how much they should attempt to involve the woman in helping with routine tasks around the home.
West Central Metropolitan Enforcement Group v. LIRC, No. 93-CV-174 (Wis. Cir. Ct. La Crosse County July 18, 1994)
The West Central Metropolitan Drug Enforcement Group (WCMEG) was a government unit formed to coordinate drug enforcement across a five county area. The WCDEG hired a number of undercover investigators who performed services for the WCDEG. One of the investigators eventually filed for unemployment and the employer asserted the investigators were independent contractors. One of the factors WCMEG had to satisfy to show that the investigators were independent contractors was that they were free of WCMEG's direction and control.
The DWD issued an initial determination, subsequently affirmed by an administrative law judge, the Labor and Industry Review Commission and the La Crosse County Circuit Court that the investigators were employees. The commission found that direction and control was present because the employer had: (1) required timely payment by the agents of reimbursable expenses; (2) required the investigators to have a vehicle and a specific insurance coverage limit; (3) controlled the hours per week the investigators worked; and (4) required the investigators to submit lengthy activity log sheets.
Wisconsin Soccer Association v. LIRC and Department of Workforce Development, Case No. 08-CV-102 (Wis. Cir. Ct., Milwaukee Co., July 22, 2008)
The Wisconsin Soccer Association (WSA) hired individuals to coach soccer teams and other individuals to referee soccer games. An Administrative law Judge (ALJ) determined that individuals who performed services as referees did so as independent contractors, and other individuals who performed services as coaches did so as employees of the WSA.
Both the Department of Workforce Development and the WSA appealed the decision of the ALJ. The Labor and Industry Review Commission (LIRC) agreed with the ALJ that the coaches were employees and reversed the ALJ and found that the referees were employees as well.
The WSA appealed LIRC's decision as to the referees. The WSA dropped its objection to the decision as to the coaches. A Milwaukee County circuit judge reversed LIRC and found that the referees were independent contractors.
In its decision as to the coaches, LIRC determined that the individuals who provided services to the WSA as soccer coaches did so as employees of the WSA for the purpose unemployment insurance. LIRC stated in its decision that individuals performing services for the WSA were not free from the direction or control of the WSA over the performance of their services.
LIRC determined that "one matter which bears on the question of direction and control has to do with the coaches' "certification" or "licensure". In its brief, WSA asserted in passing that the coaches are "required to be certified", but this begs the questions of who imposes this requirement, and who "certifies" them. The terms "certification" and "licensure" carry with them a gloss of official status, but there are in fact no Wisconsin laws providing for any required state "certification" or "licensure" of soccer coaches. The "certification" or "licensure," and the requirement for it, is entirely WSA's: it requires that coaches participate in certain training programs, which it operates. This is an element of direction and control."
Since the coaches were required by the WSA to participate in training programs in order to be certified and licensed, this training requirement demonstrates direction and control on the part of the WSA.
Further Reading and Research
If you wish to read and research further LIRC, circuit court and court of appeals cases on direction and control, please click on the following hyperlinks from the LIRC Decision Digest:
E 411 - s.108.02 (12) (c) direction and control/ independently established tests, generally (applicable to services for gov't units or non-profits, or services as logger or trucker)
EE 412 - Employee - s.108.02 (12) (c) 1. - "direction and control"
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