Kurbatov v. Department of Labor & Industry
29 A.3d 66
| Pa. Commw. Ct. | 2011Background
- PBK Construction (PBK) petitioned for reassessment of unemployment tax assessments issued for 2005–2008.
- The Department concluded PBK workers were employees, not independent contractors, and assessed unemployment taxes.
- PBK’s workers were contracted per project; PBK paid by square footage; workers submitted verbal invoices.
- PBK required workers to sign independent contractor agreements for each project and to follow PBK’s scheduling directions.
- The Department relied on written agreements and control provisions to find employment, not solely on testimony.
- Court affirmed Department’s decision, holding substantial evidence supported employee status under the two-prong test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PBK's workers were employees or independent contractors | PBK contends workers were independent contractors | Department found an employment relationship based on control | PBK failed to prove independence; workers were employees; reassessment denied |
Key Cases Cited
- Hammermill Paper Co. v. Rust Eng'g Co., 430 Pa. 365 (1968) (multi-factor test for employee status; right to control is key)
- Victor v. Dep't of Labor & Indus., 166 Pa.Cmwlth. 663 (1994) (finding control and independence requires case-specific analysis)
- Sharp Equip. Co. v. Unemployment Comp. Bd. of Review, 808 A.2d 1019 (Pa.Cmwlth.2002) (two-pronged test; control and independence)
- Glatfelter Barber Shop v. Unemployment Comp. Bd. of Review, 957 A.2d 786 (Pa.Cmwlth.2008) (barber case cited for mixed-use of personal tools vs employer control)
- CE Credits OnLine v. Unemployment Compensation Bd. of Review, 946 A.2d 1162 (Pa.Cmwlth.2008) (control over work product vs control over time/place; not always employment)
- Venango Newspapers v. Unemployment Comp. Bd. of Review, 158 Pa.Cmwlth. 379 (1993) (two-pronged test framework for independent contractor status)
- Electrolux Corp. v. Dep't of Labor & Indus., Bureau of Employer Tax Operations, 705 A.2d 1357 (Pa.Cmwlth.1998) (conjunctive test for employee vs. independent contractor status)
- Biter v. Department of Labor & Industry, 395 A.2d 670 (Pa.Cmwlth.1978) (employer's right to control can establish employment even without actual control)
- York Newspaper Co. v. Unemployment Comp. Bd. of Review, 635 A.2d 251 (Pa.Cmwlth.1993) (fact-specific assessment of employer-employee versus independent contractor)
- American Diversified Corp. v. Bureau of Employment Security, Department of Labor & Industry, 275 A.2d 423 (Pa.Cmwlth.1971) (high burden on employer to prove non-employment relation)