I. NATURE OF THE CASE
Exeell Construction Inc. (Excell) appeals a ruling by the Idaho Industrial Commission finding Exeell liable for unpaid unemployment insurance taxes. The Industrial Commission determined Excell had mischaracterized many employees engaged in covered employment as “independent contractors,” resulting in ExceU’s alleged unemployment insurance underpayment. We reverse and remand to the Industrial Commission for further proceedings.
II. FACTUAL AND PROCEDURAL BACKGROUND
Excell is in the business of selling and installing sheetrock, also known as “drywall.” The company bids for sheetrocking and related work offered by primary contractors and homeowners, providing both the materials and the labor needed to complete a project.
Excell maintains supplies of sheetrock and related items in a central storehouse, and uses company trucks and heavy equipment to haul these supplies to construction sites. On site, “hangers” cut and install the sheetrock. When they are finished, other workers clear away the resulting debris. Next “tapers” arrive to tape the sheetrock slabs and apply “mud” to make the walls appear seamless. They are followed by workers who apply texture finishes and paint.
Exeell categorizes some of its workers as “employees,” and some as “independent contractors.” Those workers who transport the sheetrock to cоnstruction sites, as well as those who clean the site and those who apply paint and texture are designated by Exeell as employees. In contrast, Excell permits hangers and tapers to elect whether they will be classified as employees or as independent contractors. For those hangers and tapers categorized as employees, Excell deducts taxes and social security from them wages. For those who are categorized as independent contractors, Excell makes no such deductions. Workers can elect to provide worker’s compensation coverage themselves, or Excell will pay for worker’s compensation coverage but adjust the worker’s rate of reimbursement accordingly. Most of the hangers and tapers that perform work for Excell are defined by the company as independent contractors.
Excell bids on the projects its workers perform, and the workers have no part in the bidding process. After reporting in as available for work or being contacted by Excell, hangers and tapers are assigned to work projects. They are paid a flat rate based on the footage of drywall completed.
Excell requires workers designated as independent contractors to sign documents Ex-cell styles as “sub-contract agreements.”
The Industrial Commission found that Ex-cell determines what materials are needed and provides these at the jobsite at its own expense. The hangers and tapers generally supply personal tools. Workers are permitted to charge tools on an Excell account and reimburse the company later.
The Industrial Commission additionally found that hangers and tapers contact Excell when they have questions about a particular project. Hangers and tapers have the authority to hire others to assist in completing projects, but this is rarely done. Most of those Excell designates as independent contractors perform work only for Excell, although they are permitted to seek work elsewhere. Either Excell or its workers may terminate the working relationship between them without incurring any liability beyond reimbursement for any labor already performed.
In March 2001, the Idaho Department of Commerce and Labor (the Department) conducted a compliancе audit of Excell covering the first quarter of 1999 through the first quarter of 2001. Following the audit, the Department issued a status determination concluding that the hangers and tapers represented by Excell as independent contractors had performed services in covered employment and therefore were reportable and taxable for unemployment insurance purposes. As Excell had not reported these workers, the compаny was assessed for unpaid unemployment insurance taxes and penalties-in the amount of $10,671.77, later adjusted downward to $6,353.26.
Excell appealed the status determination, and two days of hearings were conducted before a Department appeals examiner. After making detailed findings of fact, the appeals examiner upheld the Department’s status determination. Excell appealed to the Industrial Commission, requesting the Industrial Cоmmission consider additional evidence not presented at the hearing before the appeals examiner. The Industrial Commission declined to consider further evidence, and after a de novo review of the record it affirmed the appeals examiner’s decision.
Excell filed a timely appeal, which is presently before this Court.
III. STANDARD OF REVIEW
“On appeal from the Industrial Commission, this Court exercises free review of the Commission’s legal conclusions, but will nоt disturb findings of fact if they are supported by substantial and competent evidence.” Steen v. Denny’s Restaurant,
IV. ANALYSIS
A. Excell’s motion to allow additional evidence.
Excell argues the Industrial Commission abused its discretion in refusing to consider additional evidence not presented in the hearing conducted by the appeals examiner. The evidence at issue related to Shawn Stovall, who formerly installed drywall for Excell and who served as one of the Department’s witnesses at the hearing. Stovall testified he did not have an indepеndent business when he worked for Excell, and that despite his ostensible status as-an “independent contractor” he was fired from his position with the company.
Some time after the first day of the hearings conducted by the appeals examiner, Ex-cell obtained from the Department documents showing the Department agreed to pay unemployment benefits to Stovall. Contending that Stovall’s receipt of unemployment compensation undermined Ms credibility as a witness, Excell askеd the Industrial Commission to consider the new evidence regarding Stovall’s credibility although it was not presented at the hearing below. In its “application for rehearing/reconsideration” submitted to the Industrial Commission, Ex-cell described the new evidence, arguing it was relevant and significant. Excell did not, however, mention why it failed to raise the evidence previously.
In reviewing a decision by an appeals examiner, the record before the Industrial Commission is the same as that considered by the appeals examiner, “unless it appears to the commission that the interests of justice require that the interested parties be permitted to present additional evidence.” I.C. § 72-1368(7). The Industrial Commission’s decision to permit or exclude evidence not raised before the examiner is discretionary. Id.; Teevan v. Office of the Attorney General,
The Industrial Commission is empowered to “decide all claims for review filed by any interested party in accordance with its own rules of procedure not in conflict [with other law].” I.C. § 72-1368(7). The “Rules of Appellate Practice and Procedure under the Idaho Employment Security Law” adopted by the Industrial Commission require a party requesting a new hearing to submit with its request:
1. the reason for requesting the hearing;
2. whether the party desires to present evidence to the Industrial Commission in addition to that presented to the appeals exammer;
3. a description of the evidence the party desires to present;
4. an explanation of why the proposed evidence is relevant to the issues before the Industrial Commission; and
5. reason why the proposed evidence was not presented before the exammer.
R.A.P.P. 6(B).
In the present case, Exeell’s request for a rehearing and the admission of new evidence described the evidence at issue, why the appeal was bemg brought, and the alleged relevance and significance of the evidence. TMs met the first four requirements of R.A.P.P. 6(B) listed above. Excell neglected, however, to inform the Industrial Commission why the proposed evidence was not presented earlier, and therefore the fifth requirement of R.A.P.P. 6(B) was not satisfied. In its briefs to tMs Cоurt, Excell for the first time claims the Department was slow to turn over the documents in question, and therefore Excell’s failure to refer to those documents in the hearing was excusable. TMs argument was never presented to the Industrial Commission. TMs Court will not consider arguments raised for the first time on appeal. Combs v. Kelly Logging,
Excell also contends the Industrial Commission mistakenly determined Excell had
Because Excell did not explain in its motion to the Industrial Commission why the disputed evidence was unavailable at the hearing below, this Court finds the Commission’s refusal to conduct a new hearing or to consider new evidence was not an abuse of discretiоn.
B. Employment Status
Idaho’s Employment Security Law provides assistance for workers who face unemployment through no fault of their own. I.C. § 72-1302. Employers are obligated to pay unemployment insurance taxes based on the wages they pay to employees engaged in “covered employment.” John L. King, P.A. v. Dept. of Employment,
After weighing the legally relevant factors, the Industrial Commission determined Ex-cell’s hangers and tapers were “covered employees” for which the company was liable for unpaid unemployment insurance taxes and penalties. Excell disagrees, arguing the Industrial Commission misapplied the facts to the law.
Once it is shown that a worker received remuneration from a putative employer for performing services, that worker will be found to have been engaged in covered employment, “subject to the putative employer showing that an exemption applies.” Beale v. Dept. of Employment,
In order to merit an exemption from the presumption that services for remuneration are covered employment, the putative employer must demonstrate two things:
(a) That the worker has been and will continue to be free from control or direction in the performance of his work, both under his contract of service and in fact; and
(b) That the worker is engaged in an independently established trade, occupation, profession, or business.
I.C. § 72-1316(4) (emрhasis added). Excell does not dispute that its hangers and tapers performed services in exchange for remuneration. The Industrial Commission’s determination of whether a worker was engaged in covered employment is a question of fact this Court will uphold provided the findings are supported by substantial and competent evidence. See Stoica v. Pocol,
1. Freedom From Control
The first half of the test a putative employer must satisfy in order to qualify for an exemption from the presumption of covered employment regards the worker’s freedom from employer control. Idaho Code § 72-1316(4)(a) requires a showing “[t]hat the worker has been and will continue to be free from control or direction in the performance of his work, both under his contract of service and in fact ____” The appropriate
In making its determination, the Industrial Commission noted that Excell provided the materials with which the hangers and tapers worked, and transported these items to the jobsite. The Commission found that Excell dictated the “cоntracts” between itself and its workers regarding insurance, and Exeell controlled the rate at which it compensates its hangers and tapers. Additionally, the Industrial Commission observed that Excell retained the ability to call a worker back to correct poorly completed work, and retained the right to discharge its “subcontractors” without cause. The Commission found that in one case Excell actually exercised this option, discharging Stovаll.
In response, Exeell argues that the control ascribed to it was limited to control over the results of the work, not the “manner, method or mode” by which it was accomplished. Unlike control over the manner, method or mode by which a task is performed, merely exerting control over the results of the work does not suggest an employment relationship. Beale,
Excell’s practice of providing sheetroek and its ability to discharge workers present closer questions. Providing sheetroek could suggest that Excell desired to control the specific nature of the drywall to be installed. However, Excell plausibly argues that supplies were provided simply as a means of assuring the consistency of the materials, to thereby assure the quality оf the results. The matter of who supplies materials may be relevant in examining the relationship between the company and workers, but not to this portion of the analysis concerning control or direction over how work was performed.
Excell’s ability to discharge workers could be suggestive of a right to control the methods by which work is performed, at least in that it demonstrates Exeell could exert power over its workers if it wished to do so. The rеcord is unclear, however, whether the one instance in which Exeell exercised this ability arose from a personality conflict or a disagreement regarding the work process. The Industrial Commission did not reach a finding on that point, noting only that “Shawn Stovall testified that he was fired from a job with [Excell] after he got into a dispute with one of [ExceU’s] principals and would not apologize.” The abüity of an employer to discharge a worker at wül provides “Uttle assistance in determining the relationship between the parties.” Livingston v. Ireland Bank,
The legal conclusion that Excell controlled or directed how the hangers and tapers in question performed their work was not supported by the facts cited by the Industrial Commission. It is not a matter of the weight of evidence, but instead the Commission misapplied the facts to the law by relying on facts unrelated to the applicable legal test.
2. Independently Established Trade, Occupation, Profession, Or Business
The Industrial Commission, having arrived at the conclusion that the drywall installers were not free from Exeell’s direction and control, only summarily addressed the independently established trade, occupation, profession, or business requirement of I.C. § 72-1316(4)(b). In oral argument and in its brief to this Court, the Department conceded that the Industrial Commission issued no findings of fact or conclusions of law regarding whether the drywall installers were independently established. Because the Industrial Commission misapplied the law regarding the “control” test in I.C. § 72-1316(4)(a) and the Department has conceded the Commission never reached the “independence” test in I.C. § 72-1316(4)(b), we remand this case back to the Industrial Commission.
It should be further noted that employer liability for unpaid unemployment insurance taxes is assessed with reference to each individual worker. See I.C. § 72-1316. Consequently, when the legally relevant facts apply differеntly to some workers than to others, the Industrial Commission must reach individualized findings as to each worker, or to each similarly situated group of workers. See Anderson v. Larsen,
C. Attorney Fees
Excell rеquests attorney’s fees on appeal pursuant to I.A.R. 41, I.A.R. 11.1, I.C. §§ 72-708 and 12-117. Idaho Appellate Rule 41 provides the procedure for requesting attorney fees on appeal, but is not authority alone for awarding fees. Shawver v. Huckleberry Estates,
To support its request for attorney fees, Excell argues I.A.R. 11.1 applies to the present case. This rule provides for sanctions when a brief or other document submitted by a party is not well grounded in fact, is not warranted by existing law or a good faith argument, and “is interposed for any improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation.” I.A.R. 11.1; Rivas v. K.C. Logging,
y. CONCLUSION
The Court having found the legal conclusion concerning I.C. § 72-1316(4)(a) is unsupported by the facts referenced by the Industrial Commission, and there are no findings of fact nor conclusions of law regarding I.C. § 72 — 1316(4)(b), this case is reversed and remanded to the Industrial Commission for further proceedings. Costs to the appellant.
Notes
. In conflict with this Court, the Idaho Administrative Code allows consideration of termination without liability as a factor in both parts of the inquiry found in I.C. § 72-1316(4). IDAPA 09.01.35.112.03(d); IDAPA 09.01.35.112.04(n).