The Special Compensation Fund appeals from the compensation judge’s finding that, at the time of his injury, Burt R. Emanuel was an employee of Copper Art of Texas, pursuant to provisions of Minnesota Statutes § 176.042.  We affirm.

Burt Emanuel [the petitioner] is a self-employed contractor carpenter and has operated his own business under the name of Emanuel Construction for over twenty years.  As a licensed contractor, the petitioner specializes in home remodeling and additions.  He advertises his availability through the Yellow Pages, business cards, and word-of-mouth.  He maintains a business office in his home and, over the years, has filed tax returns reflecting his status as a self-employed individual.

Sonia Corbin owns and operates a seasonal business known as Copper Art of Texas [Copper Art].  She sells artwork at art shows during the year, at the Minnesota State Fair, and at various retail malls in several states during the Christmas holiday season.  Ralph Mayes, Ms. Corbin’s boyfriend, is a retired contractor who helps Ms. Corbin to convert retail spaces into shops to sell the artwork of Copper Art.  In October 2003, Mr. Mayes and his friend Charlie Smith were in Minnesota to convert a retail space leased by Copper Art in the River Hills Mall in Mankato.  Because Ms. Corbin wanted to complete the construction quickly, she authorized Mr. Mayes to hire additional help.  Mr. Mayes contacted the petitioner by telephone, and it was agreed that the petitioner would assist Mr. Mayes and Mr. Smith in converting the retail space on behalf of Copper Art.  The job was expected to take about a week, and Mr. Mayes agreed to pay the petitioner $30.00 per hour for his labor.

On the morning of October 28, 3003, the petitioner arrived at the job site with his tool belt.  Mr. Mayes gathered all of the workers, including the petitioner, Charlie Smith, and a man named John from a temporary agency, around a table and drew a rough sketch of what he wanted done.  All materials for the project were provided by Copper Art.  Mr. Mayes provided the necessary tools, including a table saw, ladders, compressors, hoses, and nailing guns.  After directing the petitioner, Mr. Smith, and John to install paneling and to put in doors according to his sketch, Mr. Mayes left the job site to purchase additional materials.  Later that day, the petitioner fell from a ladder and sustained an injury to his left knee, right wrist, and right arm.

On January 5, 2004, the petitioner filed a claim petition, alleging that on October 28, 2003, he was an employee of Copper Art and that his injuries arose out of and in the course of his employment.  On that date, Copper Art was not insured for workers’ compensation liability in the state of Minnesota, and therefore the Special Compensation Fund was also named as a party.  The petitioner’s claim for benefits came on for a hearing before a compensation judge on March 8, 2005.  At trial, the parties stipulated that the petitioner’s employment status was to be determined under Minnesota Statutes § 176.042 and that, at the time of his injuries, the petitioner was doing commercial building construction or improvements in the public sector.  The parties agreed also that the specific issues for the judge’s determination were (1) whether the petitioner was an employee of Copper Art or an independent contractor, and (2) whether Copper Art could prove that the petitioner met all nine conditions contained in Minnesota Statutes § 176.042, subd. 2.  The record closed on March 23, 2005.  In a Findings and Order issued May 23, 2005, the compensation judge determined that Copper Art had not proven that the petitioner met all nine conditions for independent contractor status contained in Minnesota Statutes § 176.042, subd. 2, and that therefore the petitioner was an employee of Copper Art and not an independent contractor at the time of his injury.  The Special Compensation Fund appeals.

On appeal, the Workers' Compensation Court of Appeals must determine whether "the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted."  Minn. Stat. § 176.421, subd. 1 (2004).  Substantial evidence supports the findings if, in the context of the entire record, "they are supported by evidence that a reasonable mind might accept as adequate."  Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984).  Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed.  Id. at 60, 37 W.C.D. at 240.  Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, "unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.”  Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).

The parties have agreed that the issue of the petitioner’s employment status at the time of his injury is to be determined under Minnesota Statutes § 176.042.  Subdivision 1 of that statute as in effect on the date of the petitioner’s injury reads as follows:

In Thomas v. Carpet Design Center, 61 W.C.D. 128 (W.C.C.A. 2000), this court construed Minnesota Statutes § 176.042 as representing “a major expansion of workers’ compensation coverage in the construction industry.”  We noted that subdivision 1 “begins with the premise that construction workers who are otherwise independent contractors are nevertheless deemed to be employees, entitled to protection of the act, as long as they are performing services that are part of their employer’s trade or business.”  Thomas v. Carpet Design Center, 61 W.C.D. 128, 135 (W.C.C.A. 2000) (emphasis in original).  Subdivision 2 provides an exception to this presumptive employee status if the employer establishes that all of the listed conditions for independent contractor status have been satisfied.  We stated in Thomas,

In the present case, the compensation judge, even while acknowledging that the petitioner was a licensed contractor, had business cards and yellow pages ads, maintained a separate business in his own office, and filed tax returns as a self-employed contractor, nevertheless concluded that Copper Art had not met its burden of proving all nine conditions set forth in subdivision 2 of the statute.  The judge therefore found that the petitioner was an employee under the statute.  The Special Compensation Fund contends that the petitioner’s business practices met the criteria of Minnesota Statutes § 176.042, subdivision 2, and that the judge’s finding of employee status under the statute in this case creates an absurd result unintended by the legislature.  We conclude that there is substantial evidence in the record to support the judge’s finding that Copper Art has not satisfied all of the conditions of Minnesota Statutes § 176.042, subdivision 2, and that, because employee status is the general rule under subdivision 1, the judge’s finding of such status in this case is consistent with the legislature’s intent to provide workers’ compensation coverage to construction workers who are otherwise independent contractors.

The judge determined that the petitioner did not control “the means of performing the services or work,” pursuant to the requirement at Minnesota Statutes § 176.042, subdivision 2(3), and that he did not incur the “main expenses” related to the work that he performed for Copper Art, pursuant to the requirement at subdivision 2(4).  And we agree.  Mr. Mayes acknowledged that, when the petitioner arrived at the job site, Mr. Mayes prepared a rough sketch of what he wanted done and directed the petitioner to install paneling and to put in doors according to the sketch.  All of the necessary tools, including a table saw, ladders, compressors, and nailing guns, were provided by Mr. Mayes.  Copper Art provided all materials, including the nails and the wallboard or paneling.  The Fund argues that the expenses of the service or work were shared and that the petitioner had ongoing business expenses that would be appropriately prorated against the Copper Art project.  However, while the petitioner may well have incurred some expenses that arguably could be attributable to the job in question, the evidence clearly supports the judge’s conclusion that the “main” expenses related to the work were not incurred by the petitioner.  Nor was it unreasonable for the judge to conclude that the petitioner did not control the means of performing the services or work, in view of the specific direction that he received from Mr. Mayes.

The record also supports the judge’s conclusion that the petitioner was not responsible for the satisfactory completion of the project at the River Hills Mall or that he would be liable for his failure to complete his portion of the work, as required at Minnesota Statutes § 176.042, subdivision 2(5).  While it may be inferred that the petitioner was responsible for providing work or services consistent with those of a skilled carpenter, there is no evidence to suggest that the petitioner had any ongoing responsibility for completing the work after he was injured or that he was liable for damages for not completing the work.

Minnesota Statutes § 176.042, subdivision 2(6), requires that, in order to be excluded from employee status, the independent contractor “receives compensation for work or service performed under a contract on a commission or per-job or competitive bid basis and not on any other basis” (emphasis added).  The Fund argues that the “typical contract” entered into by the petitioner called for a time and materials bid.  It is undisputed in this case, however, that the petitioner was to be paid by the hour at a rate of $30.00 per hour.  As the petitioner was being compensated for his work on a basis other than contemplated by the statute, the employer has not satisfied this condition.

Finally, the judge concluded that, because the petitioner was essentially an hourly employee of Copper Art without any significant expenses, the petitioner was not going to realize a profit or suffer a loss based on the performance of his work at the River Hills Mall as contemplated under Minnesota Statutes § 176.042, subdivision 2(7).  The Fund contends that the petitioner does realize profits and suffer losses under his contracts to perform work, including his contract with Copper Art.  It contends that the petitioner does have recurring business liabilities and obligations and that that is reflected in his annual self-employment business tax returns.  We cannot envision any basis under which the petitioner would suffer a loss under his contract with Copper Art.

Because substantial evidence in the record supports the judge’s conclusion that Copper Art was unable to prove that the petitioner met all nine exceptions contained in Minnesota Statutes § 176.042, subdivision 2, we affirm the judge’s finding that the petitioner was an employee of Copper Art and was not an independent contractor at the time of his injury.

The Fund argues also that the judge’s application of Minnesota Statutes § 176.042 in this case creates an absurd result.  It contends that, because the petitioner, under the name of Emanuel Construction, operates a business normally manifesting all of the usual trappings associated with independent operations, he should not now be construed as an employee under the statute for purposes of only this specific circumstance.  The Fund argues that, unlike the employee in the Thomas case, supra, the petitioner here has held himself out and fulfilled all of the qualifications of an independent contractor in most of his business dealings.  He had yellow page ads, business cards, word-of-mouth referrals, and business licenses.  And unlike the petitioners in DeGraw v. Zenith Exteriors, 64 W.C.D. 247, (W.C.C.A. 2004), the Fund argues, the petitioner here was not a captive subcontractor.  Copper Art was only one of many contracts that the petitioner had during the year.  While Minnesota Statutes § 176.042 “is intended to cast a broad net to classify individuals in the construction industry as employees,” it contends, “it was not the legislative intent to include [as employees] businesses that in every respect take advantage of all other laws granting privileges and rights to independent contractors and sole proprietors.  Only the true employee has unique protections when it comes to work injuries.”  We are not persuaded.

We find the Fund’s argument regarding application of the statute difficult to comprehend in light of its agreement at trial that Minnesota Statutes § 176.042 applied to the case.  Moreover, after agreeing that the statute applied, the Fund also agreed that the burden was on Copper Art to prove that the petitioner met all nine conditions set forth in Minnesota Statutes § 176.042, subdivision 2.  These conditions must be viewed in the context of the relationship between the petitioner and Copper Art, not in the context of past business arrangements or contracts.  Here, the parties stipulated that, at the time of his injury, the petitioner was an independent contractor doing commercial building construction in the public sector, excludable from employee status only by meeting all of the requirements of Minnesota Statutes § 176.042.  The petitioner was exactly the type of individual that the legislature intended to cover under the act.  Again, because Copper Art was unable to establish all of the conditions of subdivision 2 of Minnesota Statutes § 176.042, the judge properly concluded that the petitioner was an employee under the statute.  The judge’s decision is affirmed in its entirety.