112.2 Covered employment relationships; independent contractors

Applying the Spirides test, the commission found that the Complainant performed her services as the Respondent’s executive director in the capacity of an employee and not as an independent contractor. Therefore, the Division had jurisdiction over the claim. Denman v. Wis. Water Well Assoc. (LIRC, 09/29/23).

There is no rule that an individual who performs services as a member of a corporation or LLC must be considered an independent contractor per se. LIRC applies the “economic realities” test (a/k/a Spirides test) to determine whether the Complainant is an employee or an independent contractor. Denman v. Wis. Water Well Ass'n (LIRC, 11/21/19).

The Equal Rights Division has jurisdiction over a claim that the Department of Corrections deliberately intervened in the terms of an outside employment relationship by colluding with a private employer to discriminate against a Complainant who was participating in a work release program. Lofton v. State of Wis. Dep't of Corr. (LIRC, 09/27/18).

The Complainant’s allegation that the employer would not allow him to submit comments into his personnel file two years after the termination of the employment relationship had no connection to a future employment opportunity and was not covered by the WFEA. Shi v. UW Sys. Bd. of Regents (LIRC, 01/30/18).

A determination as to whether an individual is an employee or an independent contractor is so fact-intensive that a hearing is generally warranted. Williams v. State of Wis. Dep't of Vocational Rehab. (LIRC, 06/08/17).

Complainant alleged that he was refused re-entry into a master’s degree program in the Respondent-university’s English department because of his religion and sexual orientation. In order for an allegation of discrimination to come within the scope of the WFEA, it must show a nexus between the discrimination complained of and the denial or restriction of some real employment opportunity. There was no employment relationship or potential employment relationship between the Complainant and the Respondent here, only a hypothetical connection to an unidentified future employment opportunity. This is not a sufficient nexus on which to state a claim under the WFEA. Wilde v. UW-Milwaukee (LIRC, 02/27/15), aff'd, Wilde v. UW Milwaukee (Milwaukee Co. Cir. Ct., 3/28/16).

The Complainant performed services for the Respondent, for which he was paid. The fact that the Complainant was not licensed as an apprentice funeral director does not necessarily mean that he was not an employee of the Respondent, a mortuary. While the record does not contain sufficient evidence to permit an analysis of all the factors used to determine whether an individual is an employee or an independent contractor, the evidence presented indicated that the Respondent had the right to control the means and manner of the Complainant’s job performance, that he was paid by the week and not by the job, that the services he performed for the Respondent were integral to its business, and that it was the intention of the parties that the Complainant work for the Respondent as an apprentice funeral director (a job which is usually done under the direction of a supervisor). This was sufficient to warrant a conclusion that the Complainant was an employee of the Respondent, without regard to whether he had a license. Jackson v. New Pitts Mortuary (LIRC, 10/31/12).

In cases decided under Title VII, the Seventh Circuit Court of Appeals has determined that a plaintiff must prove the existence of an employment relationship in order to maintain a Title VII action against a defendant. In these cases, the federal court recognized that the employer’s right to control is the most important factor when determining whether an individual is an employee or an independent contractor. The federal court has focused on the following five factors: (1) The extent of the employer’s control and supervision over the worker, including directions on scheduling and performance of work; (2) the kind of occupation and nature and skill required, including whether skills are obtained in the work place; (3) responsibility for the costs of operation, such as equipment, supplies, fees, licenses, work place, and maintenance of operations; (4) method and form of payment and benefits; and (5) length of job commitment and/or expectations. Using this test, the Complainant in this case failed to prove the existence of an employment relationship. Ingram v. Bridgeman Mach. Tooling & Packaging (LIRC, 06/27/05).

There can be instances in which the Department will have jurisdiction over a claim of discrimination even in the absence of an actual or potential employment relationship between the parties. However, in this case the Complainant did not allege that the Respondent engaged in actions which were directly related to her employment opportunities such as would fall within the purview of the Wisconsin Fair Employment Act. The Complainant’s allegations were that she was subjected to harassing conduct on the part of her fellow students, which led her to drop a class, and that the Respondent further harassed her by giving her a failing mark in a class she dropped rather than indicating that she had withdrawn. The Complainant’s allegations do not fall within the types of discriminatory conduct prohibited by the Wisconsin Fair Employment Act under sec. 111.322(1), Stats. Hinkforth v. Milwaukee Area Tech. College (LIRC, 02/23/04).

Determination of whether an individual is an employee or an independent contractor for purposes of the Fair Employment Law involve analysis of the “economic realities” of the work relationship. All of the circumstances surrounding the work relationship should be considered. The most important factor is the employer’s right to control the “means and manner” of the workers’ performance. Additional matters of fact that may be considered include the following: (1) the kind of occupation, with reference to whether the work usually is done under the direction of a supervisor, (2) the skill required in the particular occupation, (3) whether the “employer” furnishes the equipment used and the place of work, (4) the length of time during which the individual has worked, (5) the method of payment (whether by time or by the job), (6) the manner in which the work relationship is terminated, (7) whether annual leave is afforded, (8) whether the work is an integral part of the business of the “employer,” (9) whether the worker accumulates retirement benefits, (10) whether the “employer” pays social security taxes, and (11) the intention of the parties. Sneed v. Milwaukee Bd. of Sch. Dir. (LIRC, 06/17/03).

The test for determining whether an individual is an employee under the Wisconsin Fair Employment Act is the test set forth in Spirides v. Reinhardt, 613 F.2d 826 (D.C. Cir. 1979), which was adopted by the Wisconsin Court of Appeals in Moore v. LIRC, 175 Wis. 2d 561, 499 N.W.2d 287 (Ct. App. 1993). The test in Revenue Ruling 87- 41, 1987-1 CB 296, in which the Internal Revenue Service sets forth several factors it uses to determine whether a worker is an independent contractor, is not applicable. The factors utilized by the IRS focus on the common law concept of right to control the services of the worker for purposes of determining taxpayer status. However, Wisconsin has adopted the Spirides test for determining whether an individual is an employee under the WFEA. Sneed v. Milwaukee Bd. of Sch. Dir. (LIRC, 06/17/03).

The Complainant, who delivered newspapers for the Respondent, had an “Independent Carrier Contract” with the company. There were some facets of the relationship between the Complainant and the Respondent that might tend to suggest that the relationship was one of employee-employer. However, on balance, considering the total circumstances surrounding the working relationship, it appears that the relationship must be considered that of an independent contractor relationship and, therefore, not covered under the Wisconsin Fair Employment Act. Berglund v. Post Crescent (LIRC, 01/31/01).

Where the Complainant was the owner of a general contracting business who performed work at the direction of the Respondent school district, he was not an employee of the school district since the school district did not control the means and manner of his work. Omegbu v. Mequon-Thiensville Sch. Dist. (LIRC, 12/21/95), aff’d sub nom. Omegbu v. LIRC (Milwaukee Co. Cir. Ct., 07/01/96); aff’d (Ct. App., Dist II, unpublished opinion, 07/17/96).

The Wisconsin Fair Employment Act prohibits acts of unlawful employment discrimination; however, it does not define the term “employment” for purposes of determining employee status, and thus entitlement to the protections afforded under the Act. The Labor and Industry Review Commission has adopted the “hybrid” standard which combines the common law “right to control” and “economic realities” tests cited in Moore v. LIRC, 175 Wis. 2d 561, 499 N.W.2d 289 (Ct. App. 1993). In this case, the Complainant failed to establish that the owner of a real estate company exercised the type of control over her in the performance of her work as a real estate broker that would support a finding of employee status. A real estate broker is a specialist and a professional working without supervision by the very nature of the work. Schaefer v. New Berlin Realty (LIRC, 11/17/95).

A hospital was an “employer” for purposes of the Wisconsin Fair Employment Act where it allowed physicians to practice there, where it granted staff privileges, and where it provided terms and conditions and privileges of employment through contracts either directly or indirectly with physicians through a separate Medical Center. Bourque v. LIRC (Marathon Co. Cir. Ct., 11/16/95), aff’d on other grounds, Ct. App., Dist. III, unpublished opinion, 11/26/96.

The language in Eklund v. Tomah-Mauston Broad. Co. (LIRC, 09/19/86) which states that independent contractors are covered under the Wisconsin Fair Employment Act is dicta and has been effectively overturned by the Wisconsin Court of Appeals’ decision in Moore v. LIRC, 175 Wis. 2d 561, 499 N.W.2d 289 (Ct. App. 1993). Schaefer v. New Berlin Realty (LIRC, 06/10/93).

A stockholder of a corporation is not automatically precluded from filing a discrimination complaint against the corporation where she was also an employee. Schaefer v. New Berlin Realty (LIRC, 06/10/93).

The determination of whether an individual is an employee or an independent contractor involves an analysis of the “economic realities” of the work relationship. Consideration of all of the circumstances surrounding the work relationship is essential, and no one factor is determinative.

Nevertheless, the extent of the employer’s right to control the “means and manner” of the worker’s performance is the most important factor. Other factors which may be considered include: (1) the kind of occupation, with reference to whether the work usually is done under the direction of a supervisor, (2) the skill required in the particular occupation, (3) whether the “employer” of the individual in question furnishes the equipment used and the place of work, (4) the length of time during which the individual has worked, (5) the method of payment, i.e. whether by time or by the job, (6) the manner in which the work relationship is terminated, (7) whether annual leave is given, (8) whether the work is an integral part of the business of the “employer,” (9) whether the “employer” pays social security taxes, and (10) the intention of the parties. Moore v. LIRC, 175 Wis. 2d 561, 499 N.W.2d 287 (Ct. App. 1993).

LIRC found no merit in the Respondent’s contention that the Complainant, who worked under a contract to provide services to the Respondent, was not an employee of the Respondent for purposes of the Wisconsin Fair Employment Act. Jackson v. City of Milwaukee (LIRC, 12/14/90).

The Wisconsin Fair Employment Act covered an allegation that a cooperative organization of taxicab owners, which used membership fees to operate a central office which provided dispatching and clerical services, discriminated against the Complainant, who drove a cab for a member-owner of the co-op on a lease basis. The Act is at least as inclusive in its coverage of relationships as is Title VII. Russ v. City Veterans Cab Co. (LIRC, 12/04/87).

Where the employer continued to have the right to control the means and manner of the Complainant's work performance and retained the right to unilaterally terminate the relationship, and where the Complainant continued to be covered under group insurance paid in part by the Respondent and was given a health insurance conversion notice upon termination, the Complainant was an employee of the Respondent and not an independent contractor. Eklund v. Tomah-Mauston Broad. Co. (LIRC, 09/19/86).

Even if a Complainant is considered to have been an independent contractor, as opposed to an employee, the Complainant was still covered by the Wisconsin Fair Employment Act. Eklund v. Tomah-Mauston Broad. Co. (LIRC, 09/19/86).

The Wisconsin Fair Employment Act does not cover the right to purchase a proprietary interest in a business. Keys v. LIRC (Polk Co. Cir. Ct., 07/01/85).

Whether a Respondent is an employer within the meaning of the Act must be determined on an individualized basis looking at the totality of the circumstances which bear upon the degree of direction and control exercised over the Complainant. Where a person had almost no control over the details of his employment and was subject to the rules, regulations, procedures, authority and evaluation of the Respondent, an employer/employee relationship has been shown. Lohse v. Western Express (LIRC, 10/19/84).

The relationship between a hospital and a staff physician is not an employee/employer relationship where a doctor seeking staff privileges is not hired by the hospital and is not on its payroll and the hospital does not dictate his treatment or admission of patients. Sergeant v. Holy Family Hosp. (LIRC, 02/17/81).

A long-haul freight company which leases tractors and trailers from owner-operators of such equipment is an employer and the truck drivers are employees within the meaning of the Act. The Act does not provide an exemption for independent contractors, but even if it did, such an exemption would not be applied in this case because the company controlled not only the result of the truck driver’s services, but also the manner in which they were to be performed. Lyon v. Pirkle Refrigerated Freight (DILHR, 11/02/73); also, Kollath v. Madison Pub. Sch. (LIRC, 07/25/77).