L&I, UEGF v. WCAB (Lin and Eastern Taste)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Department of Labor and Industry, :
Uninsured Employers Guaranty :
Fund, :
Petitioner :
:
v. : No. 627 C.D. 2016
: SUBMITTED: November 4, 2016
Workers' Compensation Appeal :
Board (Lin and Eastern Taste), :
Respondents :
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE JULIA K. HEARTHWAY, Judge
HONORABLE JOSEPH M. COSGROVE, Judge
OPINION BY
JUDGE HEARTHWAY FILED: February 17, 2017
The Commonwealth of Pennsylvania, Department of Labor and
Industry, Uninsured Employers Guaranty Fund (Fund) petitions for review of the
March 23, 2016, order of the Workers’ Compensation Appeal Board (Board),
which affirmed the October 28, 2015, decision of the workers’ compensation judge
(WCJ) awarding Fu Xiang Lin (Claimant) benefits on remand pursuant to the
Board’s previous order of January 6, 2015, and which made the Board’s January 6,
2015, order final. Because we determine that Claimant was not an employee of
Eastern Taste at the time of his injury, we reverse.
On March 28, 2011, Claimant was injured while doing remodeling
work for Eastern Taste, a restaurant that had not yet opened for business.
(Findings of Fact (F.F.), Nos. 1, 5c.)1 Claimant subsequently filed a Claim Petition
against Eastern Taste, and later, a Notice of Claim against the uninsured employer,
Eastern Taste. (F.F Nos. 2-3.) Claimant then filed a Claim Petition against the
uninsured employer and the Fund. (F.F. No. 4.)
During the litigation before the WCJ, the issue of whether Claimant
was an employee of Eastern Taste was bifurcated from the medical issues of the
claim. (Reproduced Record (R.R.) at 37a-38a.). Claimant testified on his own
behalf. Eastern Taste presented the testimony of Kon Bin Wang (Wang), the
restaurant owner’s husband, and Gheng Renkuar (Renkuar), who was also working
on remodeling the restaurant. (F.F. Nos. 6a, 7a.) Based on the testimony, the WCJ
found that the critical facts were essentially undisputed and made the following
findings:
a. Eastern Taste is a restaurant, not a construction business.
b. The Claimant was hired to do remodeling before the
restaurant had ever opened.
c. The most experienced person on the job in the
construction business was the Claimant.
d. The owner's husband was in charge of what needed to be
done.
e. The Claimant was paid on a per diem basis to do it along
with three others.
f. The Claimant used his own tools and van. The owner's
husband provided tools and materials as well.
1
All references to the Findings of Fact and Conclusions of Law (C.L.) are to those set forth in
the WCJ’s decision dated April 17, 2013.
2
(WCJ’s F.F. Nos. 9a-f.) The WCJ further determined that: (i) Claimant was not an
employee of Eastern Taste Restaurant; (ii) Claimant’s work was not in the regular
course of the business of Eastern Taste; and (iii) Claimant’s employment was
casual in nature.2 (F.F. Nos. 10-12.) The WCJ concluded that Claimant failed to
sustain his burden to prove that he was an employee of Eastern Taste.
(Conclusions of Law (C.L.) No. 2.) The WCJ also determined that Claimant was
not considered an employee under the Construction Workplace Misclassification
Act (CWMA).3 The WCJ reasoned that the CWMA does not apply as Eastern
Taste is not in the construction industry. (C.L. No. 4, WCJ’s opinion (op.) at 4.)
Consequently, the WCJ denied Claimant’s Claim Petitions filed against Eastern
Taste and the Fund.
Claimant appealed the WCJ’s decision to the Board. On January 6,
2015, the Board issued an opinion in which it concluded that Claimant was an
employee of Eastern Taste. (Board’s 1/6/15 op. at 5.) The Board also concluded
that Claimant’s employment was not casual in nature. (Board’s 1/6/15 op. at 5-6.)
Accordingly, the Board reversed the WCJ’s decision and remanded the matter to
2
The WCJ characterized these determinations as findings of fact, but they are really conclusions
of law. See Brookhaven Baptist Church v. Workers’ Compensation Appeal Board (Halvorson),
912 A.2d 770 (Pa. 2006) (concerning casual and in the regular course of business); Universal
Am-Can, Ltd. v. Workers’ Compensation Appeal Board (Minteer), 762 A.2d 328 (Pa. 2000)
(concerning employee). The Workers’ Compensation Act defines an employee to be
“synonymous with servant, and includes—[a]ll natural persons who perform services for another
for a valuable consideration, exclusive of … persons whose employment is casual in character
and not in the regular course of the business of the employer ….” Section 104 of the Act of June
2, 1915, P.L. 736, as amended, 77 P.S. § 22.
3
Act of October 13, 2010, P.L. 506, 43 P.S. §§ 933.1-933.17.
3
the WCJ for necessary findings and conclusions for an award of compensation and
litigation costs, if any. (Board’s 1/6/15 op. at 8.)
On remand, the WCJ entered an order, dated October 28, 2015,
granting Claimant’s Claim Petition and awarding benefits to Claimant. (R.R. at
141a.) The Fund then appealed to the Board and requested that the Board’s
January 6, 2015, opinion be made final for the purpose of appealing to this Court.
(R.R. at 143a-45a.) On March 23, 2016, the Board issued an opinion making its
January 6, 2015, order final, and affirming the WCJ’s decision dated October 28,
2015. (R.R. at 149a-52a.)
The Fund now appeals to this Court.4 The Fund argues that the WCJ’s
April 17, 2013, decision was supported by substantial evidence, and that the Board
exceeded its authority by reweighing the evidence and engaging in impermissible
fact-finding. The Fund further argues that the Board erred by relying on its
impermissible “findings” to conclude Claimant was an employee.
In order to determine if the Board engaged in fact-finding, we must
review the Board’s “findings” and any inferences therefrom against those made by
the WCJ to determine if they are consistent. In doing so, we are necessarily tasked
with reviewing the WCJ’s findings to determine if they are supported by
substantial evidence. In other words, “we examine the entire record to see if it
4
Our scope of review is limited to determining whether constitutional rights have been violated,
whether an error of law was committed and whether necessary findings of fact are supported by
substantial evidence. Johnson v. Workmen’s Compensation Appeal Board (Dubois Courier
Express), 631 A.2d 693 (Pa. Cmwlth. 1993).
4
contains evidence a reasonable person might find sufficient to support the WCJ’s
findings.” Edwards v. Workers’ Compensation Appeal Board (Epicure Home
Care, Inc.), 134 A.3d 1156, 1161 (Pa. Cmwlth. 2016). “Further, we must view the
evidence in the light most favorable to the prevailing party and give it the benefit
of all inferences reasonably deduced from the evidence.” Id. at 1161-62. “[I]t is
irrelevant whether the record contains evidence to support findings other than those
made by the WCJ; the critical inquiry is whether there is evidence to support the
findings actually made.” Id. at 1161 (quotation marks and citation omitted). If so,
“the findings must be upheld, even though the record may contain conflicting
evidence.”5 Id.
In explaining that Claimant met his burden to establish that he was an
employee, the Board stated that “[a]lthough Claimant had experience in the
construction industry, it was as an employee; he did not engage in his own
construction business.” (Board op. at 5.) The Board also stated that Claimant was
not hired as a contractor to do anything specific, and his position, therefore, was a
general laborer. Finally, the Board stated Claimant was “under the supervision” of
Wang. (Board op. at 5.) We will examine the basis for the Board’s findings
seriatim.
With respect to Claimant’s experience in the construction industry, the
WCJ found only that Claimant had worked for the past four years for Stone King 6
5
WCJ, as the ultimate fact-finder in workers’ compensation cases, has exclusive province
“The
over questions of credibility and evidentiary weight.” Edwards, 134 A.3d at 1161 (internal
quotation marks and citation omitted).
6
Stone King does kitchen and bath remodeling. (R.R. at 44a.)
5
doing remodeling and that he had done remodeling for 15 years. (F.F. No. 5k.)
This finding is supported by Claimant’s testimony. (R.R. at 44a, 55a.) In light of
this WCJ finding, it would be fair for the Board to conclude that Claimant worked
in the role of employee for four years with Stone King. But neither the WCJ’s
findings nor the record support the Board’s conclusion that all of Claimant’s
construction experience was in the role of employee. It was error for the Board to
expand the breadth of the WCJ’s finding in this regard where the record does not
support that expansion. Additionally, even if the Board’s conclusions about
Claimant’s past status were supported by the record, his status in the past is of very
limited significance.
Likewise, the Board’s assertion that Claimant “did not engage in his
own construction business” cannot be fairly extended to his entire remodeling
career. We recognize that the WCJ stated, in the context of Claimant’s work for
Eastern Taste, that there was no evidence that Claimant had established a business
in which he had a proprietary interest. (WCJ’s op. at 4.) Though the lack of a
proprietary interest in a business is a factor to be considered,7 this factor standing
alone is legally insufficient to warrant a conclusion that Claimant was an employee
of Eastern Taste.
With respect to whether Claimant was hired to do anything specific,
the WCJ found “Claimant was hired to do remodeling ….” (F.F. No. 9b.) The
Fund contends that while Wang testified that Claimant was not hired for any
7
See discussion, infra, concerning factors to consider in determining whether an employer-
employee relationship exists as set forth by the Pennsylvania Supreme Court in Universal Am-
Can and related analysis.
6
specific tasks within the remodeling project, Claimant was hired specifically for
the remodeling project. At the hearing, Claimant was asked what he was hired to
do. (R.R. at 32a.) Claimant responded by giving examples of the work he was
performing, such as tiling the floor and putting something on the ceiling, and stated
that he was doing interior remodeling. (R.R. at 32a.) Additionally, while Wang
stated that Claimant was not hired for anything specific, Wang also stated that he
told Claimant to do whatever the blueprint said. (R.R. at 79a-80a.) Moreover,
both Claimant and Wang testified that Claimant was not expected to work in the
restaurant once the remodeling was completed. (R.R. at 49a-50a, 59a, 73a.) Thus,
viewing this evidence in the light most favorable to the prevailing party and giving
it the benefit of all inferences reasonably deduced therefrom, Edwards, a person
could reasonably conclude that Claimant was hired specifically for remodeling.
Consequently, the WCJ’s finding that Claimant was hired to do remodeling is
supported by substantial evidence, and therefore, was binding on the Board. The
Board erred by disregarding the WCJ’s finding and substituting its finding that
Claimant was not hired to do anything specific from which it inferred, also
erroneously, that Claimant’s position was that of a general laborer.
With respect to whether Claimant was “under the supervision” of
Wang, (Board op. at 5), this, too, was neither the WCJ’s finding, nor a fair
inference therefrom. The WCJ’s findings of fact simply state that Wang was “in
charge of what needed to be done.” (F.F. No. 9d.) In his discussion, the WCJ
states that Wang told Claimant “what he wanted done” and Claimant’s job “was to
do it[,]” explaining “[t]his is essentially the same relationship that property owners
7
typically have with painters, plumbers, electricians, carpenters and other
remodelers. These specialists bring their time and expertise.” (WCJ’s op. at 4.)
Wang testified that he got the blueprints from the architect and
provided them to the workers. (F.F. No. 6f; R.R. at 78a.) Wang testified that he
was not in charge of the construction process, and that he did not direct Claimant’s
specific work activities because Claimant was the experienced remodeler. (F.F.
Nos. 6f; R.R. at 78a, 82a.) Indeed, Wang had no construction or remodeling
experience and testified that he did not know anything about construction. (F.F.
No. 6f; R.R. at 73a.) Wang testified that he was just there to buy materials when
needed. (R.R. at 78a.) Further, Claimant testified that at the time of his injury,
Wang was out buying welding sticks. (F.F. No. 5i; R.R. at 46a.) Renkuar also
testified that Wang was in charge but that Wang never told Renkuar what to do on
the construction site. (F.F. Nos. 7a & c; R.R. at 89a-90a.) Viewing this evidence
in the light most favorable to the prevailing party and giving it the benefit of all
inferences reasonably deduced therefrom, as we are required to do,8 a reasonable
person could conclude that Wang “was in charge of what needed to be done” in a
manner similar to that of property owners and specialists, such as painters,
plumbers, etc., as explained by the WCJ. In essence, when the WCJ’s statement is
taken in context of this explanation, the reasonable inference from this finding is
that Wang was in charge of what needed to be done only in terms of the overall
goal of the project and not in a step-by-step, supervisory capacity.
8
Edwards.
8
In sum, the Board exceeded its authority by making “findings,”
which, at a minimum, went beyond those made by the WCJ. Arguably, the
evidence might support some of the statements made by the Board. However, this
is immaterial as the record supports the findings made by the WCJ. See Moberg v.
Workers’ Compensation Appeal Board (Twining Village), 995 A.2d 385 (Pa.
Cmwlth. 2010); see also Edwards, 134 A.3d at 1161 (stating that it is irrelevant
whether the record contains evidence to support findings other than those made by
the WCJ). Because the Board engaged in impermissible fact-finding and then
relied on those “facts” to support its conclusion that Claimant was an employee,
the Board erred and its conclusion cannot stand.9 Importantly, although the
question of whether one is an employee is a question of law, it must be answered
based on the unique facts of each case. Universal Am-Can, Ltd. v. Workers’
Compensation Appeal Board (Minteer), 762 A.2d 328 (Pa. 2000). The Board did
not base its legal conclusion on the facts as found by the WCJ, and that was error.
Having found that the Board erred by engaging in new fact-finding
and drawing new inferences, and having further found that the WCJ’s findings of
fact are supported by substantial evidence and inferences reasonably deduced from
such evidence, we are now tasked with determining whether the evidence,
nonetheless, was sufficient to legally conclude Claimant was an employee of
Eastern Taste. Because the determination as to the existence of an
9
We recognize that our Supreme Court has stated that “‘neither the compensation authorities nor
the courts should be solicitous to find contractorship rather than employment, and that inferences
favoring the claim need make only slightly stronger appeal to reason than those opposed.’”
Universal Am-Can, Ltd., 762 at 330 (quoting Diehl v. Keystone Alloys Co., 156 A.2d 818, 820
(Pa. 1959)). This does not mean that the Board can make its own findings.
9
employer/employee relationship is a question of law, on this issue, our scope of
review is plenary and our standard of review is de novo. Edwards. The Fund
argues that based on the WCJ’s binding findings of fact, the WCJ properly
concluded that Claimant was not an employee of Eastern Taste. We agree.
Whether one’s status is that of an employee or independent contractor
“is a crucial threshold determination that must be made before granting workers’
compensation benefits.” Universal Am-Can, 762 A.2d at 330. This is because
independent contractors cannot recover benefits under the Workers’ Compensation
Act (WC Act).10 Edwards. The claimant bears the “burden to establish an
employer/employee relationship in order to receive benefits.” Universal Am-Can,
762 A.2d at 330.
Section 104 of the WC Act defines an employee to be “synonymous
with servant, and includes—[a]ll natural persons who perform services for another
for a valuable consideration, exclusive of … persons whose employment is casual
in character and not in the regular course of the business of the employer ….” 77
P.S. § 22. There is no bright line rule for determining whether a particular
relationship is that of an employer-employee or owner-independent contractor.
Universal Am-Can. Nevertheless, our Supreme Court has established the
following factors that must be considered when making such determination:
Control of manner work is to be done; responsibility for
result only; terms of agreement between the parties; the
nature of the work or occupation; skill required for
10
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 1-1041.4, 2501-2708.
10
performance; whether one is engaged in a distinct
occupation or business; which party supplied the tools;
whether payment is by the time or by the job; whether
work is part of the regular business of the employer, and
also the right to terminate the employment at any time.
Id. at 333 (quotation marks and citations omitted) (quoting Hammermill Paper
Company v. Rust Engineering Company, 243 A.2d 389, 392 (Pa. 1968)).
“Whether some or all of these factors exist in any given situation is not
controlling.” Id. Although each factor is relevant, “control over the work to be
completed and the manner in which it is to be performed are the primary factors in
determining employee status.” Id. “Moreover, it is the existence of the right to
control that is significant, irrespective of whether the control is actually exercised.”
Id. (emphasis in original).
We have already discussed the evidence supporting the WCJ’s finding
that Wang was “in charge of what needed to be done,” stating that Wang told
Claimant “what he wanted done” and Claimant’s job “was to do it.” (F.F. 9d,
WCJ’s op. at 4.) The WCJ explained “[t]his is essentially the same relationship
that property owners typically have with painters, plumbers, electricians,
carpenters and other remodelers. These specialists bring their time and expertise.”
(WCJ’s op. at 4.) The reasonable inference from the evidence is that Wang was in
charge of the overall goals of the project and did not control the manner in which
the work was to be completed. Where one reserves no control over the means of
accomplishing a contract but merely reserves control as to the result, “the
employment is an independent one establishing the relation of contractee and
contractor and not that of master and servant.” Gillingham v. Consol Energy, Inc.,
51 A.3d 841 (Pa. Super. 2012). Additional factors that are relevant here are that
11
Eastern Taste is a restaurant, not a construction business, and that Claimant was
hired to perform remodeling. Claimant did not expect to work in the restaurant
after the remodeling. Lastly, although Wang provided some tools and the
materials, Claimant used his own tools and van.
Based on these facts, and keeping in mind that Claimant bears the
burden of proof to establish an employer-employee relationship, Universal Am
Can, and that we must view the evidence in the light most favorable to the
prevailing party and give it the benefit of all inferences reasonably deduced from
the evidence, Edwards, the WCJ’s conclusion that Claimant was not an employee
was reasonable. Thus, we cannot say that it was in error as a matter of law.11
That does not end our inquiry, however. We must also consider
whether Claimant would be defined as an employee pursuant to the CWMA. The
CWMA concerns the construction industry and affects the determination of who is
an independent contractor versus an employee under the WC Act. See sections 2
& 3 of the CWMA, 43 P.S. §§ 933.2, 933.3. Section 2 of the CWMA, 43 P.S. §
933.2, defines the terms “employer” and “employee” as having the same meaning
given to them in sections 103 and 104, respectively, of the WC Act, 77 P.S. §§ 21,
22. Because we have already determined that Claimant was not an employee of
Eastern Taste under section 104 of the WC Act, 77 P.S. § 22, we need not address
that further here. However, Section 3 of the CWMA provides the requisite, and
11
The Board also concluded, contrary to the WCJ’s conclusion, that Claimant was not excluded
as an employee under section 104 of the WC Act, 77 P.S. § 22, because his employment was not
casual. Because of our disposition, we need not address this.
12
different, criteria under which an individual who performs services in the
construction industry for remuneration will be deemed an independent contractor
for purposes of workers’ compensation.12 43 P.S. § 933.3. If a worker falls within
the purview of the CWMA and does not meet the requirements to be considered an
independent contractor under the CWMA, then that individual will be deemed to
be an employee for purposes of workers’ compensation. See 43 P.S. § 933.3.
Significantly, section 3 of the CWMA applies only to “an individual who performs
services in the construction industry for remuneration ….” 43 P.S. § 933.3(a)
(emphasis added).
Here, the WCJ found that the CWMA was not applicable, because
Eastern Taste is a restaurant in the restaurant business and not in the construction
business.13 (WCJ’s op. at 4.) The WCJ further noted his belief that the CWMA
12
Section 3(a) of the CWMA provides as the general rule:
For purposes of workers’ compensation, … an individual who
performs services in the construction industry for remuneration is
an independent contractor only if:
(1) The individual has a written contract to perform
such services.
(2) The individual is free from control or direction over
performance of such services both under the contract of service
and in fact.
(3) As to such services, the individual is customarily
engaged in an independently established trade, occupation,
profession or business.
43 P.S. § 933.3(a). Section 3 further sets forth criteria related to the aforementioned elements, as
well as factors that are not to be considered in the determination. 43 P.S. § 933.3(b), (c).
13
The WCJ stated, however, that if the CWMA applied, then the result would be entirely
different. Claimant would be deemed an employee pursuant to the CWMA, because, among
other reasons, there was no written contract. (WCJ’s op. at 4.)
13
was never intended to apply to all construction activities without regard to
context.14 (WCJ’s op. at 4.)
Thus, the dispositive question to determining if one falls within the
purview of the CWMA is whether the individual is performing services for
remuneration “in the construction industry.” This is a question of first impression.
Although the plain language of the CWMA applies only to those individuals who
are performing services for remuneration “in the construction industry,” 15 the
CWMA does not explicitly define the phrase “in the construction industry.”
The CWMA defines the term “construction,”16 but it does not define
the term “industry.” Therefore, the term must be construed according to its
common and approved usage. See section 1903(a) of the Statutory Construction
Act of 1972, 1 Pa. C.S. § 1903(a). The term “industry” is commonly defined as
“skill, employment involving skill” and “a department or branch of a craft, art,
business or manufacture.” WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY
1155 (2002).
14
The Board did not address the CWMA, apparently because it was not necessary to do so given
the Board’s conclusion that Claimant was an employee pursuant to the WC Act and its related
case law. We can decide this issue without a remand to the Board, however. “Issues of statutory
interpretation present questions of law to which a plenary scope of review and de novo standard
of review apply.” S & H Transport, Inc. v. City of York, 102 A.3d 599, 601 n.4 (Pa. Cmwlth.
2014), aff’d, 140 A.3d 1 (Pa. 2016).
15
See 43 P.S. § 933.3(a).
16
The CWMA defines “construction” as “[e]rection, reconstruction, demolition, alteration,
modification, custom fabrication, building, assembling, site preparation and repair work done on
any real property or premises under contract, whether or not the work is for a public body and
paid for from public funds.” 43 P.S. § 933.2.
14
Claimant argues that the CWMA applies because the statute makes no
distinctions as to what the primary business purpose of the employer may be.
Claimant also argues that, at the time of his injury, Eastern Taste had not yet
opened for business, and therefore, its only operation was currently restaurant
construction. Claimant maintains that by virtue of the fact that Eastern Taste chose
to undertake the construction and remodeling, it in essence took on the role of a
general contractor in the construction industry. Giving Claimant the benefit of the
doubt that arguably, the meaning of the phrase “in the construction industry” is
ambiguous, we may resort to resources beyond the plain language of the statute to
discern the legislative intent of the General Assembly. Commonwealth v.
Highhawk, 687 A.2d 1123 (Pa. Super. 1996). Section 1921(c) of the Statutory
Construction Act of 1972 permits an interpreting body to consider:
(1) The occasion and necessity for the statute.
(2) The circumstances under which it was enacted.
(3) The mischief to be remedied.
(4) The object to be attained.
(5) The former law, if any including other statutes upon
the same or similar subjects.
(6) The consequences of a particular interpretation.
(7) The contemporaneous legislative history.
(8) Legislative and administrative interpretations of such
statute.
1 Pa. C.S. § 1921(c). Further, we are to “presume that the General Assembly did
not intend a result that is absurd, impossible of execution, or unreasonable.”
Highhawk, 687 A.2d at 1126. After reviewing the relevant factors above, we
conclude that the question must be answered by looking at each particular situation
in context, and specifically, with regard to the putative employer.
15
The CWMA was intended to limit those who would be deemed
independent contractors, as opposed to employees, and was intended to address
concerns that some employers were misclassifying workers as independent
contractors, rather than employees, in order to avoid things such as payment of
unemployment taxes and workers’ compensation premiums. 17 See H. JOURNAL,
193D-33, Reg. Sess., at 743 (Pa. 2009).
17
In particular, Representative Lentz, who was one of the sponsors of House Bill 400, which,
after amendments, ultimately became the CWMA, stated:
Some construction firms routinely classify their employees as
“independent contractors” for the specific purpose of avoiding the
payment of decent wages, health benefits, pensions, as well as
Federal and State and local employment taxes that other legitimate
employers pay.
…
The fact that this is an open and flagrant practice that siphons
money from the revenues that the State is otherwise due makes it
even more important that we address it now during this critical
economic period in our history.
…
The bill in its current form gives the Department of Labor [and
Industry] the ability to crack down on this practice to capture that
revenue, but it also gives legitimate employers a way to comply
with the law and to continue in the construction industry in a
legitimate fashion.
H. JOURNAL, 193D-33, Reg. Sess., at 743 (Pa. 2009). “Statements made by legislators during
the enactment process, although not dispositive of legislative intent, may be properly considered
as part of the contemporaneous legislative history.” Lukes v. Department of Public Welfare, 976
A.2d 609, 619 (Pa. Cmwlth. 2009) (superseded by statute on other grounds as stated in In re
Silberstein, 11 A.3d 629 (Pa. Cmwlth. 2011)).
16
Additionally, documents issued by the Pennsylvania Department of
Labor and Industry (Department)18 since the enactment of the CWMA establish
that it is the character and context of the putative employer that is determinative.
We gain significant insight from the Department Secretary’s annual legislatively
mandated report19 in which she detailed the Department’s enforcement activities
and listed the reasons for rejecting referrals concerning alleged misclassification
violations under the CWMA. Those reasons for rejected referrals included, that
“the employers were not in the construction industry[.]” 20 Additionally, the
Department’s complaint form seeks information on the business being complained
about and asks, “[w]hat type of construction services does the business perform?” 21
“We are mindful that, when ascertaining the General Assembly’s intent with
regard to ambiguous statutory language, courts are to give strong deference to an
administrative agency’s interpretation of a statute that the agency is charged to
enforce.” Dixon v. Workers’ Compensation Appeal Board (Medrad, Inc.), 134
A.3d 518, 526 (Pa. Cmwlth. 2016).
18
The Department is responsible for administering and enforcing the CWMA. See Sections 13,
14 & 17 of the CWMA, 43 P.S. §§ 933.13, 933.14, 933.17.
19
See Section 14 of the CWMA, 43 P.S. § 933.14 (requiring the Secretary of the Department to
issue an annual report detailing “data on the previous calendar year’s administration and
enforcement” of the CWMA).
20
KATHY MANDERINO, ACTING SECRETARY OF LABOR & INDUSTRY COMMONWEALTH OF
PENNSYLVANIA, ADMINISTRATION AND ENFORCEMENT OF THE CONSTRUCTION WORKPLACE
MISCLASSIFICATION ACT IN 2014 13 (March 1, 2015), http://www.dli.pa.gov/Individuals/Labor-
Management-Relations/Documents/Act%2072%20report%202014.pdf? (last visited January 4,
2017).
21
PENNSYLVANIA DEPARTMENT OF LABOR & INDUSTRY BUREAU OF LABOR LAW COMPLIANCE,
CONSTRUCTION WORKPLACE MISCLASSIFICATION COMPLAINT FORM, LLC-72 02-11 at 1,
http://www.dli.pa.gov/Individuals/Labor-Management-Relations/llc/act72/Documents/ LLC-
72.pdf (last visited January 4, 2017).
17
Lastly, we are mindful that when construing legislative intent, we
presume that the General Assembly did not intend a result that is absurd or
unreasonable. Highhawk. Claimant’s argument, that by virtue of Eastern Taste
choosing to undertake construction and remodeling, it in essence took on the role
of a general contractor in the construction industry, leads to an absurd and
unreasonable result. Such interpretation of the CWMA would have the effect of
turning every individual and business choosing to undertake any remodeling
project into an employer “in the construction industry.” Thus, given the legislative
intent, including the Department’s interpretation, we conclude that when
determining whether the CWMA is applicable to the situation at hand, the
construction activity must be analyzed and considered in the context of the putative
employer’s industry or business.
Here, the WCJ found that the putative employer, Eastern Taste, was a
restaurant business and not a construction business. (F.F. No. 9a.) This finding is
supported by substantial evidence. (R.R. at 73a.) Therefore, because Eastern
Taste is not in the construction industry, the CWMA does not apply to the
circumstances here.
Accordingly, based on the foregoing, we conclude that Claimant
failed to sustain his burden of proving that he was an employee of Eastern Taste.
Therefore, we reverse the order of the Board; Claimant is ineligible for workers’
compensation benefits.
__________________________________
JULIA K. HEARTHWAY, Judge
Judge Cosgrove dissents.
18
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Department of Labor and Industry, :
Uninsured Employers Guaranty :
Fund, :
Petitioner :
:
v. : No. 627 C.D. 2016
:
Workers' Compensation Appeal :
Board (Lin and Eastern Taste), :
Respondents :
ORDER
AND NOW, this 17th day of February, 2017, the order of the
Workers’ Compensation Appeal Board is hereby reversed.
__________________________________
JULIA K. HEARTHWAY, Judge