may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
David R. Beaudet, et al.,
Commissioner of Economic Security,
Filed April 13, 1999
Toussaint, Chief Judge
Department of Economic Security File No. 59T98
Juan J. Martinez, Gregory A. Abbott, Weinblatt & Gaylord, PLC, 336 North Roberts Street, Suite 1616, St. Paul, MN 55101 (for relators)
Kent E. Todd, Department of Economic Security, 390 North Robert Street, St. Paul, MN 55101 (for respondent Commissioner of Economic Security)
Considered and decided by Toussaint, Chief Judge, Randall, Judge, and Huspeni, Judge.[*]
TOUSSAINT, Chief Judge
Relators, David Beaudet and Mary Whirley, challenge the Commissioner of Economic Security's determination that respondent, Mike Oliveraz, was an employee, rather than an independent contractor, for the purpose of reemployment insurance eligibility. Relators argue that the evidence does not reasonably support the commissioner's (1) finding that relators controlled the means and manner of Oliveraz's performance; and (2) conclusion that an employment relationship existed. Because (1) the evidence in the record reasonably tends to support the commissioner's findings; and (2) the findings support a legal determination that an employment relationship existed, we affirm.
The question of whether a worker is an independent contractor or an employee is a mixed question of law and fact. Blue & White Taxi v. Carlson, 496 N.W.2d 826, 828 (Minn. App. 1993). We apply a two-step analysis when reviewing an agency's determination of a worker's employment status. Neve v. Austin Daily Herald, 552 N.W.2d 45, 47 (Minn. App. 1996). First, if the facts are disputed, we determine whether the evidence reasonably tends to support the commissioner's findings of fact. Id. We view those findings in the light most favorable to the commissioner's decision, White v. Metropolitan Medical Ctr., 332 N.W.2d 25, 26 (Minn. 1983), though our deference is not without limit, Neve, 552 N.W.2d at 47. Next, we apply the law to the facts to determine whether an employment relationship existed. Id. at 48. Whether an employment relationship exists is a legal issue. Id. (quoting Hunter v. Crawford Door Sales, 501 N.W.2d 623, 624 (Minn. 1993)). We are not bound by the commissioner's conclusions of law. Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).
Employment is the performance of any service by an "individual who is considered an employee under the common law of employer-employee, and not considered an independent contractor." Minn. Stat. § 269.035, subd. 15(1) (1998). Five essential factors traditionally determine whether an individual is an employee or an independent contractor: (1) the right to control the means and manner of performance; (2) the right to discharge the worker without incurring liability; (3) the mode of payment; (4) the furnishing of materials and tools; and (5) the degree of control over the premises where the services are performed. Minn. R. 3315.0555, subp. 1 (1997). The first two factors are the most important. Id. Other factors may also be considered if a determination is inconclusive after applying the above five factors. Id.
Relators do not dispute the commissioner's findings that they (1) had the right to discharge Oliveraz with little or no notice without incurring liability; (2) paid Oliveraz by the hour, rather than by the job; and (3) provided Oliveraz with the tools and materials needed for assignments that required large amounts of cement or tools Oliveraz did not own. Nor do they dispute that Oliveraz performed all work for relators on relators' premises; however, this was because the work could not be performed elsewhere. See Minn. R. 3315.0555, subp. 3(D) ("Doing work on the employing unit's premises is not control in itself[,]" especially when work cannot be performed elsewhere). Thus, the only issue on appeal is whether the record tends reasonably to support the commissioner's determination that relators had the right to determine the means and manner of performance of Oliveraz's services. We conclude that it does.
Minnesota rule 3315.0555, subp. 3 (1997) sets forth 13 factors to be considered in determining whether an employer had the right to control the means and manner of a worker's performance. The majority of those factors support the commissioner's determination that relators had the right to control Oliveraz's performance, even though they did not always exercise that right. See Burman Co. v. Zahler, 286 Minn. 400, 411 nm.5, 178 N.W.2d 234, 241 n.5 (1970) (stating it is the right to control, rather than the exercise of that right, that is determinative).
The record shows that (1) relators hired and paid for Oliveraz's assistants when he needed them; (2) Oliveraz had a continuing working relationship with relators for approximately four years on a full-time, seasonal basis; (3) Oliveraz did not make his services available to the general public on a continuing basis, even though he once did cement repair work for another person while working for relators; (4) relators had the right to discharge Oliveraz with little notice, without cause, or for failure to follow specified rules or methods; (5) relators furnished Oliveraz with tools and materials, except those customarily furnished by workers in the cement trade; and (6) relators reimbursed Oliveraz for expenses. The record also supports the commissioner's finding that Oliveraz had no substantial investment in the equipment or premises he used in performing his work. These facilities were provided to him by relator and required no substantial expenditure on his part. See Minn. R. 3315.0555, subp. 2(E) (1997) ("The furnishing of all necessary facilities by the employing unit tends to indicate the absence of an independent status.").
Admittedly, as the commissioner recognized, some factors support a determination that Oliveraz was an independent contractor. For example, Oliveraz signed a personal liability waiver indicating he was an independent contractor and was responsible for paying his own taxes. In addition, he had the right to decline assignments from relators and to accept assignments from other contractors. These factors do not compel the conclusion that Oliveraz was an independent contractor, however. Under Minnesota law, the labels the parties give themselves and the employer's decision not to withhold income and social security taxes are not determinative. Johnson v. Independent Sch. Dist. No. 535, 291 N.W.2d 699, (Minn. 1980) (labels); Graalum v. Radisson Ramp, 245 Minn. 54, 71 N.W.2d 904 (1955) (taxes); see also LeGrand Supper Club v. Seline, 348 N.W.2d 805, 808 (Minn. App. 1984) (taxes). Given the evidence and the remedial purpose of the reemployment insurance statute, we opt for a broad interpretation in favor of awarding benefits. See Sith v. Employer's Overload Co., 314 N.W.2d 220, 221-22 (Minn. 1981) (stating unemployment compensation statute is remedial in nature and must therefore be liberally construed to effectuate public policy of Minn. Stat. § 268.03 (1980)). We therefore conclude that the record reasonably tends to support the commissioner's determination that Oliveraz was an employee, rather than an independent contractor.
[*] Retired judge of the Minnesota Court of Appeals, serving by apointment pursuant to Minn. Const. art. VI, § 10.