ARGUED: April 10, 2019
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE ROBERT SIMPSON, Judge HONORABLE P. KEVIN BROBSON,
Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE
E. COVEY, Judge, HONORABLE CHRISTINE FIZZANO CANNON, Judge
HONORABLE ELLEN CEISLER, Judge.
Counseling Services, LLC (Pathways) petitions for review from
a decision and order of the Department of Labor and Industry,
Office of Unemployment Compensation Tax Services (Department)
denying Pathways' petition for reassessment. Pathways
argues it is not the employer of the professional counselors
who provide services in its building and to whom it provides
client referrals. Accordingly, Pathways contends the
Department erred in assessing unemployment compensation (UC)
taxes related to those counselors. After thorough review, we
Counselors' Contracts with Pathways
has contracts with a number of insurance companies to provide
referrals for counseling, the costs of which are covered by
insurance. Insurers do not contract directly with individual
psychologists or counseling practices. Instead, Pathways
contracts with the counselors and provides them with
referrals from the insurers. The counselors are then
compensated through Pathways with funds paid by the insurers
for the counseling services provided to their insureds.
also has clients who are referred for counseling by other
agencies or providers. Pathways in turn refers those clients
to the counselors. Payment is made through Pathways by the
clients for those services as well.
provides office space to each counselor with whom it
contracts. Pathways provides each office with telephone and
fax service, as well as limited furniture. However,
counselors supply most of their own office furnishings.
Pathways also provides billing service. Although counselors
are not required to use that service, they generally do take
advantage of it. Counselors are responsible for their own
professional licensing and fees, as well as professional
liability insurance. Pathways does not provide any employment
return for its referrals, office space, and other services,
Pathways retains a percentage of the fees it receives on
behalf of each contracting counselor. The percentage retained
varies individually between 30% and 40%. If for any reason an
insurer or client does not pay for service, the counselor who
provided that service is not paid by Pathways. Thus, each
counselor bears the primary risk of any nonpayment for
services by or on behalf of a client, although Pathways also
risks losing its 30-40% fee for unpaid services.
are free to, and do, accept counseling clients from sources
other than Pathways. Counselors are likewise free to, and do,
enter into services contracts with entities other than
Pathways, providing services at various
choose their own business card designs, as well as the
information to be included on the business cards. They are
not required to identify any affiliation with Pathways on
their business cards. Pathways features its counselors on its
website, but individual counselors may market their practices
separately as well.
decide which referrals to accept from Pathways, as well as
what other clients and contracts to accept. Counselors may
decline referrals from Pathways at their discretion without
adverse consequences, although Pathways acknowledged its
business model would not work if the counselors did not
accept any of its referrals.
set their own hours and control their own schedules. They
have their own keys to the building and are free to schedule
appointments outside normal business hours if they wish.
Pathways does not set the amounts of clients' fees;
counselors and clients determine the fee amounts, presumably
subject to limits on insurance coverage amounts if
applicable. A counselor may also freely ...