Opinion
No. CO-96-1857.
Filed May 21, 1997.
Appeal from the Department of Economic Security, File No. 455T95.
Michael Golant, (Respondent Pro Se)
John B. Lennes, Jr., Bale, Anderson, Polstein, Pearson Hill, Ltd., (for Relator)
Kent E. Todd, (for Respondent Commissioner)
Considered and decided by Crippen, Presiding Judge, Lansing, Judge, and Peterson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
MCS Language Connection, Inc. challenges the Commissioner's representative's determination that an employer/employee relationship existed between MCS and Michael Golant. We reverse.
FACTS
Relator MCS Language Connection, Inc. provides foreign language interpreters to businesses and government agencies. Respondent Michael Golant performed language translation and interpretation services for MCS pursuant to a written agreement. The agreement provided that Golant was to be available on an on call, as needed basis, to accept assignments as requested, and to be "neutral, accurate, confidential and punctual." The agreement was terminable by either party upon 30 days written notice and required Golant to personally provide his services.
The agreement also explained that MCS had no control over the details of Golant's work and liabilities. The agreement stated that Golant was viewed as an independent contractor and expected to pay all taxes directly to the federal and state governments. The agreement further stated that it included "[Golant's] rights to operate as an independent contractor, and [MCS's] rights to make use of independent contractors such as [Golant]." While working with MCS, Golant had the right to perform interpretation services for his own customers and other referral agencies, as long as they were not customers of MCS.
Golant normally worked about four assignments per week, each assignment lasting about one and one-half hours. MCS paid Golant by the hour and reimbursed him for some work related expenses, such as parking and transportation. Golant also received mileage payments. Golant was paid twice a month.
Golant wrote a letter to MCS stating his intention to resign his position as an interpreter. Upon his resignation, Golant filed a claim for reemployment insurance benefits. The Commissioner's representative determined that an employer/employee relationship existed between MCS and Golant along with others performing similar services.
DECISION
In a reemployment insurance case, "whether a worker is an employee or independent contractor is a mixed question of law and fact." Neve v. Austin Daily Herald , 552 N.W.2d 45, 47 (Minn.App. 1996). When the facts are not in dispute, whether an employment relationship exists is purely a legal question." Id. at 48. We review legal questions de novo. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n , 358 N.W.2d 639, 642 (Minn. 1984).
In the present case, the facts are undisputed. MCS argues that the Commissioner's representative erred in determining that Golant was an employee rather than an independent contractor. We agree.
The label given by the parties to their relationship is not determinative of whether an employer/employee relationship exists; the relationship is determined by law. Speaks, Inc. v. Jensen , 309 Minn. 48, 51, 243 N.W.2d 142, 145 (1976). Five factors are used to determine whether an individual is an employee or an independent contractor:
(1) The right to control the means and manner of performance;
(2) the mode of payment;
(3) the furnishing of material or tools;
(4) the control of the premises where the work is done; and
(5) the right of the employer to discharge.
Boily v. Commissioner of Econ. Sec. , 544 N.W.2d 295, 296 (Minn. 1996); see also Minn. R. 3315.0555, subpt. 1 (1995) (codifying five factors). In addition to these five essential factors, Minn. R. 3315.055, subpt. 2 (1995) lists eight additional factors to be considered.
The right to control the means and manner of performance generally carries the greatest weight in a determination of the worker's status.
Boily , 544 N.W.2d at 296.
1. Right to Control
The Commissioner's representative determined that MCS had a substantial amount of control over the means and manner of Golant's performance and that Golant therefore was an employee. We disagree.
The determinative right of control is not merely over what is to be done, but primarily over how it is to be done.
Neve , 552 N.W.2d at 48 (quoting Frankle v. Twedt , 234 Minn. 42, 47, 47 N.W.2d 482, 487 (1951)). Although MCS controlled the amount of work referred to Golant and the client for whom Golant performed services, MCS did not directly supervise Golant's work or control the manner in which he performed his services once he reached the client's premises. Rather, Golant exercised his discretion and judgment over how to accomplish each assignment. Golant's exclusive control over the means and manner of a project's completion shows he was an independent contractor.
The fact that Golant was free to perform services for other interpretation and translation agencies also supports the conclusion that he was an independent contractor. See Wise v. Denesen Insulation Co. , 387 N.W.2d 477, 481 (Minn.App. 1986) (fact that salespeople were free to work for other employers was evidence of independent contractor relationship).
2. Mode of Payment
The fact that Golant was paid by the hour suggests an employment relationship. See Minn. R. 3315.0555, subpt. 2.B (payment by the hour is indicative of employment relationship). But Golant was responsible for paying his state and federal tax obligations. This fact is indicative of an independent contractor. See Neve , 552 N.W.2d at 48 (evidence that person assumed sole responsibility for her tax obligations was one factor supporting conclusion that she was independent contractor). Given these conflicting indications, the mode of payment factor is neutral.
3. Furnishing of Materials
Golant required few tools or materials to perform his services. MCS supplied Golant with a work order form that he was to complete for each job. The furnishing of this form by itself was not indicative of an employer/employee relationship. See Wise , 387 N.W.2d at 480 (furnishing business cards and other accouterments to salespeople not controlling in determining whether employment relationship existed). Further, MCS's furnishing of some materials to Golant does not establish the existence of an employment relationship when MCS lacked the right to direct and control Golant's job performance. See id. (provision of materials did not establish employment relationship when company had no right to control salesperson's job performance).
4. Control of Premises
Golant performed no services on premises controlled by MCS and, instead, performed all services on the client's premises. MCS therefore had no control over the premises where Golant performed his services, which suggests that he was an independent contractor. See Carey v. Coty Constr. , 392 N.W.2d 746, 749 (Minn.App. 1986) (company's lack of control over work premises supported conclusion that independent contractor relationship existed).
5. Right of Discharge
Each party had the right to terminate the agreement upon 30 days notice. The fact that Golant was not subject to immediate discharge supports the conclusion that he was an independent contractor. See Neve , 552 N.W.2d at 48 (fact that newspaper carrier was not subject to immediate discharge supported conclusion that she was an independent contractor).
After considering the five factors in the record before us, giving greatest weight to the right to control Golant's performance, we conclude Golant was an independent contractor. The Commissioner's representative erred in determining an employment relationship existed.