Appeals from the Orders of the Unemployment Compensation Board of Review in cases of In Re: Claim of Edward J. Hussak, Decision No. B-109269, Appeal No. B-71-7-E-48, and In Re: Claim of John F. Scanlon, Decision No. B-109270, Appeal No. B-71-7-E-49.
Norbert A. Michalski, for appellant.
Sydney Reuben, Assistant Attorney General, with him J. Shane Creamer, Attorney General, for appellee.
Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. President Judge Bowman did not participate. Opinion by Judge Blatt.
These are appeals from Orders of the Unemployment Compensation Board of Review (Board) holding that two former employees of the appellant were entitled to unemployment compensation benefits.
The appellant had asked Edward J. Hussak and John Scanlon (claimants) to perform plumbing and carpentry work, and he alleges that they signed subcontractor agreements at the time they began work and that they were independent contractors throughout the
time concerned. No contract for Hussak was produced before the Board and he denied that he had ever signed one. A "subcontractor agreement" with Scanlon's name thereon was produced, but Scanlon denied having ever signed it. There was evidence introduced before the referee showing that the appellant had never deducted Social Security or income taxes from the claimants' wages, and had never paid any unemployment compensation taxes in connection with their work. The claimants were paid a set hourly wage which they received weekly, irrespective of the job on which they were engaged. Neither of the claimants had any plumbing experience prior to being hired by the appellant, and, in the appellant's own words, Hussak "came to me to go to work to learn the plumbing trade."*fn1 The claimants were assigned to jobs as the appellant specified and used the appellant's tools and materials. They had no business of their own and worked exclusively for the appellant during the time at issue.
The claimants were both dismissed by the appellant on December 31, 1970, and both applied for unemployment compensation benefits. The Bureau of Employment Security denied benefits, because the record showed that no unemployment compensation taxes had been paid, but, when an appeal was taken by the claimants and a hearing held before a referee appointed by the Board, the referee found that the claimants were not independent contractors but were in fact employees and entitled to benefits. The appellant then appealed to the Board, but it affirmed the referee's decision and adopted his findings of fact and conclusions of law.
The courts of this Commonwealth have strictly construed the conditions which govern in cases where an employer alleges that he is not liable for the payment of an unemployment compensation tax or that a former worker is not eligible for unemployment compensation benefits. "The Unemployment Compensation Law of Pennsylvania goes very far, and properly so, and places a very heavy burden on the applicant when it makes payment to anyone who has performed a service to excuse or exempt that payment from the unemployment compensation tax." American Diversified Corporation v. Bureau of Employment Security, Department of Labor and Industry, 1 Pa. Commonwealth Ct. 527, 533, 275 A.2d 423, 426 (1971). Once it is shown that an individual has performed services for wages, the burden shifts to the employer to show why the Unemployment Compensation Act permits an exemption. Bureau of Employment Security v. Hecker & Co., 409 Pa. 117, 185 A.2d 549 (1962).
The courts have rightly insisted that the definition of the law be applied as written, and Section 401 of the Unemployment Compensation Act*fn2 basically provides that an unemployed worker is entitled to benefits if he has received wages for "employment." In defining the term "employment," Section 4(1)(2)(B) of the Act, 43 P.S. § 753(1)(2)(B) provides: "Services performed by an individual for wages shall be deemed to be employment subject to this act, unless and until it is shown to the satisfaction of the department that -- (a) such individual has been and will continue to be free from control or ...