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Part 1: Direction and Control - Indian Tribal Government
Factor Five - Oral or Written Reports (Case Studies)
Whether the individual is required to make oral or written reports to the employing unit on a regular basis.
Case Studies relevant to Factor Five
Racine Psychological Services, S.C. v. LIRC, No. 91-CV-1222 (Wis. Cir. Ct. Racine County March 29, 1993)
DILHR conducted an audit at Racine Psychological Services, S.C. (RPS) and determined that certain psychotherapists performing services through or for RPS were its employees for unemployment compensation purposes and assessed it for additional unemployment compensation taxes. One of the individuals reclassified as an employee was a psychiatrist.
RPS appealed the initial determination and a hearing was held. The administrative law judge determined that certain of the individuals who performed services for RPS were employees, but that the psychiatrist was not. The department petitioned LIRC for review. LIRC held that all of the individuals in question, including the psychiatrist, were employees for unemployment compensation purposes.
RPS then appealed LIRC's decision to the Racine County Circuit Court. Prior to briefs being submitted, the Wisconsin Court of Appeals issued a decision in Goldberg v. DILHR, 168 Wis. 2d 621, 484 N.W. 2d 568 (Ct. App. 1992) That decision held that individuals who provided psychotherapy services for a mental health clinic in the Racine area did so as employees and not independent contractors. Based on the Goldberg decision, RPS dropped its appeal for all its psychotherapists, except for one psychiatrist.
The circuit court reversed LIRC and held that the psychiatrist was not an employee of RPS and based its decision on Goldberg v. DILHR. Goldberg v. DILHR concerned a mental health clinic having to control the activities of those who worked in it to avoid running afoul of the Wisconsin Department of Health and Social Services administrative rules. The court of appeals found that this was no different than the type of control to which any independent contractor would be subject. The case involving RPS is distinguishable from Goldberg because there was no evidence the psychiatrist could be subject to any kind of supervision by clinic management, unlike in Goldberg.
Any reports filed by the psychiatrist were required by the government and not the clinic management. The reporting was done for the purposes of the government and not the clinic.
The psychiatrist at RPS performed his services in an independently established trade, business or profession in which he was customarily engaged. He performed psychiatric services for or five different entities. The evidence of economic independence and the professional reputation clearly showed an independent business.
John Schimmer operated a veal growing business and provided individuals identified as "veal growers" with calves owned by him. The veal growers cared for the calves for 17 weeks in facilities owned or rented by the veal growers. At the end of the 17 week cycle, Schimmer had the calves sold. The Labor and Industry and Review Commission found that the veal growers utilized by Schimmer were not free of Schimmer's direction and control and were employees and not independent contractors.
One of the growers who Schimmer stipulated could be taken as representative of all of the growers, testified that it was "a requirement" that growers fill out a weekly report, which reported day by day on feed and medication application and other developments. Whether or not it was common for Schimmer to actually exercise this authority and enforce these requirements, it is clear that he had retained authority to do so. Based on this and the other evidence in the record, the commission found as a matter of fact that the persons performing services for Schimmer as veal growers were not free from the employing unit's control or direction over the performance of their services both under their contracts and in fact.
Further Reading and Research
Read and research further LIRC, circuit court and court of appeals cases on Factor Five:
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Part 2 - Six of Nine Conditions