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The (Unemployment Compensation) Benefits of Not Minding One’s Own Business

The discernment of who is or who is not an independent contractor for the purposes of unemployment compensation has become more refined per the recent Commonwealth Court matter of Staffmore v. Unemployment Compensation Board of Review, 92 A.3d 844 (Pa.Cmwlth. 2014).

The Claimant for unemployment compensation benefits went through a series of appeals and reversals until he found himself before Commonwealth Court. The Claimant was found ineligible for benefits by the Unemployment Compensation Service Center, but that decision was reversed after an appeal to, and hearing before, an unemployment compensation Referee. The Employer appealed to the Unemployed Compensation Board of Review which reversed the Referee’s decision. The Claimant filed for reconsideration which resulted in reversal of the Board’s decision. That decision was reversed after the Employer filed for reconsideration. However, after reviewing the case again, the Board found in favor of the Claimant, which led to the Employer appealing to the Commonwealth Court.

The Employer is a staffing service which provides workers to agencies for the care of children. Claimant worked for the Employer as therapeutic support staff. He was free to accept or reject clients, he signed an independent contract agreement, he was supervised by a behavioral specialist, who was not an employee of Employer but developed a treatment plan Claimant was obliged to follow. Claimant only worked seven (7) hours per week providing services for a single client. Claimant worked in the education field while he also worked for the Employer. Eventually, Claimant’s client no longer needed further services and Claimant subsequently advised the Employer that he would not accept any further assignments from the Employer.

It was uncontested that Claimant was free from the Employer’s control. The only issue before the Court was whether Claimant was customarily engaged in an independently-established trade, occupation, profession and/or business. If he was, he would be ineligible for unemployment compensation benefits as he would be an independent contractor. Of course, the Court made it clear that unemployment compensation law is to be construed and applied liberally in order to ensure the broadest possible availability of benefits.

In its review of the case law, the Court noted that a worker is an independent contractor only if he is in business for himself. To that end, he must be customarily engaged in an independently established trade, occupation, profession, or business. The Court was clear that the Employer bears the burden to supply evidence of Claimant’s engagement in an independent business.

Although the Claimant was free from the control of the Employer, he testified that he was never, at any relevant time, customarily engaged in the business of providing therapeutic support. Claimant testified that his primary source of income, and indeed his chosen field, was working in education, not as therapeutic support staff, and never held himself out as being available for employment by anyone else other than Employer. Significantly, the Employer provided no evidence that Claimant provided comparable services to any other business or entity.

Based on the above, the Court found that the Employer simply did not provide sufficient evidence to prove that Claimant was engaged in an established business; however, the Court was concerned that Claimant testified that he appeared to have quit his position with the Employer. Consequently, the Court ruled that while Claimant may be eligible for benefits as he was not self-employed, he could be ineligible due to having voluntarily quit. As a result, the Court remanded the case back to the unemployment compensation referee to elicit more information on the circumstances of Claimant’s termination of his employment with the Employer.

Originally published on December 28, 2015 in Upon Further Review and can be found here.

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