July 8, 2010
LUVIA LOPEZ, PETITIONER-APPELLANT,
LISA MOSER, RESPONDENT-RESPONDENT.
On appeal from the New Jersey Department of Labor and Workforce Development, Division of Workers' Compensation.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 9, 2010
Before Judges Sabatino and J. N. Harris.
The pivotal issue in this workers' compensation case is whether petitioner was acting in a capacity as respondent's employee when she injured herself while cleaning respondent's kitchen. Because we concur with the compensation judge's finding that petitioner was an independent contractor and not respondent's employee, we affirm the dismissal of her petition for benefits.
The relevant facts are not complicated. About four to six years ago, petitioner Luvia Lopez and her friend Lucretia Uresal*fn1 started a housecleaning business together. In that business venture, petitioner and Uresal provided "basic cleaning" services, including dusting, vacuuming, sweeping, and bathroom cleaning. The homeowners were expected to provide them with the necessary cleaning supplies. Through this joint venture, petitioner and Uresal cleaned numerous houses on five or six days each week, working six to eight hours each day.
Petitioner and Uresal charged their customers between $60 and $80 per cleaning, depending upon the size of the house. The customers typically paid them in cash, and the two women would evenly split the money. The customers did not withhold sums for Social Security or any other common payroll deductions.
Petitioner and Uresal printed fliers that advertised their service as "Two Ladies Cleaning." They also printed up a business card utilizing that name. However, the women did not create a business listing, or register their trade name. Nor did they form a corporation or any other licensed business enterprise.
At some point in 2006, respondent Lisa Moser, after receiving the flyer, inquired about the availability of petitioner and Uresal to clean her house in Hamilton Township. Respondent was then pregnant and she needed someone to do "general house cleaning." The parties agreed that the cleaners would come to respondent's home on alternate Fridays between the hours of 10:00 a.m. and 2:00 p.m. The parties also agreed upon a price of $60 per cleaning visit. Consistent with the business's usual practices, respondent provided the cleaning supplies.
Prior to the accident in question, petitioner and Uresal cleaned respondent's house approximately three times. They spent roughly three hours cleaning her house on each occasion, but if they stayed longer than three hours they were still only paid the agreed-upon $60 charge. In paying for the cleaning service, respondent did not withhold any unemployment deductions, Social Security, or taxes. She did not pay the two cleaners individually, but instead "hand[ed] $60 to one of them[.]"
Petitioner and Uresal generally cleaned respondent's home without her supervision and according to their own arrangements. On one or two occasions, respondent asked them to perform additional cleaning. Respondent did not have to call to tell the cleaners to come to her house; rather, the cleaners would arrive at the prescribed time on a regular basis.
The incident that gave rise to petitioner's claim for workers' compensation occurred on June 2, 2006, while petitioner was cleaning the top of respondent's refrigerator. Petitioner was standing on a chair and fell, sustaining an injury to her arm. At the time of petitioner's fall, respondent was not present in the house, but her sixteen-year-old daughter was there. Respondent had not instructed her daughter to check on the cleaners while they were working to "see what they were doing."
After the incident, petitioner and Uresal cleaned respondent's house on one more occasion. Following that last visit, respondent's family took care of the housecleaning without hiring another commercial service.
In February 2008, petitioner filed a petition for workers' compensation benefits against respondent. Respondent filed an answer which, among other things, denied being petitioner's employer. The compensation judge assigned to the case then bifurcated the issues of liability and compensability, with the liability issues to be tried first.
Thereafter, the compensation judge conducted hearings on the liability issues on non-consecutive days in April and June 2009. During those two days of hearings, the judge was presented with testimony from respondent, petitioner, and Uresal (who testified through an interpreter).
After considering the testimony and the arguments of counsel, the compensation judge ruled that petitioner was not an employee of respondent within the meaning of N.J.S.A. 34:15-36 and therefore did not qualify for workers' compensation benefits. Consistent with that ruling, the judge issued an order dismissing the petition, as amplified in a written opinion.
On appeal, petitioner contends that the compensation judge applied the legal tests for employment status under N.J.S.A. 34:15-36 too strictly in this case. Petitioner urges that she should be classified as an employee for purposes of workers' compensation benefits. She emphasizes, among other things, that she worked regularly at respondent's home every two weeks and that respondent provided her and Uresal with the cleaning supplies that were used. Petitioner also maintains that, as a matter of public policy, it would be unduly harsh for unskilled domestic workers such as herself in comparable informal circumstances to be deprived of the protective safety net of our workers' compensation laws.
In reviewing the application of the law to the facts here, we bear in mind the expertise of compensation judges in ruling upon claims founded upon our workers' compensation statutes. See, e.g., Close v. Kordulak Bros., 44 N.J. 589, 599 (1965); Perez v. Capitol Ornamental, Concrete Specialties, Inc., 288 N.J. Super. 359, 367 (App. Div. 1996). We generally defer to that expertise, provided that the compensation judge's factual findings are supported by substantial credible evidence in the record and the judge's legal rulings comport with the pertinent statutes and case law. Perez, supra, 288 N.J. Super. at 367.
Under N.J.S.A. 34:15-36, a petitioner is eligible for workers' compensation benefits if he or she was injured while acting in the capacity of the respondent's employee. An "employee" is defined within that statute, in pertinent part, as: synonymous with servant, and includes all natural persons... who perform service for an employer for financial consideration, exclusive of... casual employments, which shall be defined, if in connection with the employer's business, as employment the occasion for which arises by chance or is purely accidental; or if not in connection with any business of the employer, as employment not regular, periodic or recurring... [.] [Ibid.]
By contrast, an "independent contractor" not entitled to workers' compensation benefits has been defined within our laws as:
"one who, carrying on an independent business, contracts to do a piece of work according to his own methods, and without being subject to the control of his employer as to the means by which the result is to be accomplished, but only as to the result of the work." [Lesniewski v. W.B. Furze Corp., 308 N.J. Super. 270, 280 (App. Div. 1998) (quoting Cappadonna v. Passaic Motors, Inc., 136 N.J.L. 299, 300 (Sup. Ct. 1947), aff'd, 137 N.J.L. 661 (E. & A. 1948)).]
In general, our courts have applied two distinct legal tests in workers' compensation cases when determining if a petitioner is an eligible employee or, alternatively, an ineligible independent contractor: (1) the "control" test, and (2) the "relative nature of the work" test. Lesniewski, supra, 308 N.J. Super. at 280; see also Sloan v. Luyando, 305 N.J. Super. 140, 148 (App. Div. 1997). The compensation judge ruled that petitioner cannot fairly and sensibly be classified as an employee of respondent under either of these tests. We agree.
Under the "control" test, an employer/employee relationship exists when the employer retains the right to choose not only what is done, but how it is done. Pollack v. Pino's Formal Wear & Tailoring, 253 N.J. Super. 397, 408 (App. Div.), certif. denied, 130 N.J. 6 (1992). The right to control is more determinative than the exercise of control. Ibid. Courts typically consider several factors in assessing the presence or absence of control, including "evidence of the right of control, right of termination, furnishing of equipment, and method of payment." Aetna Ins. Co. v. Trans Am. Trucking Serv., Inc., 261 N.J. Super. 316, 327 (App. Div. 1993). Here, the record facts strongly support the trial court's conclusion that petitioner was an independent contractor under the control test.
Respondent did not control how petitioner and Uresal would go about cleaning her house. The cleaners performed their tasks independently, without supervision. This comports with common sense and societal norms. For example, it would be highly unusual for a homeowner who hires a cleaning service to dictate that the cleaners should use only clockwise scrubbing motions, or that they should vacuum only after they have completed cleaning the bathrooms.
We recognize, as did the compensation judge, that respondent sometimes did request the cleaners to perform additional tasks that were not part of their usual arrangements. However, the manner in which such added tasks would be performed were not prescribed by the homeowner. In fact, the subject accident did not occur as the result of petitioner falling off of a chair that respondent had designated for her to stand on when cleaning the top of the refrigerator. The manner in which petitioner elevated her position to reach above the appliance was clearly her own choice.
Additionally, respondent paid the cleaners a flat negotiated amount of $60, as opposed to paying each of them $30 individually. This payment arrangement further supports the conclusion that the cleaners were paid as a business service, not as individuals. Notably, respondent did not deduct Social Security and taxes from her payments.
We appreciate the fact that respondent provided all of the cleaning supplies to petitioner and her partner, an arrangement that is typical within an employer-employee relationship. However, that one aspect of the parties' relationship was reasonably found by the compensation judge to be inadequate to establish respondent's "control" of the work.
The compensation judge likewise did not err in his application of the "relative nature of the work" test. Under this alternative construct, a court will find that an employer-employee relationship exists if a "substantial economic dependence" upon the employer is proven and it is also demonstrated that there is a "functional integration" of their respective operations. Caicco v. Toto Bros., Inc., 62 N.J. 305, 310 (1973); see also Luyando, 305 N.J. Super. at 148; Rossnagle v. Capra, 127 N.J. Super. 507, 517 (App. Div. 1973), aff'd o.b., 64 N.J. 549 (1974). As part of this assessment, the court considers whether the work done by the petitioner was an "integral part of the regular business" of the respondent. Pollack, supra, 253 N.J. Super. at 408; Rossnagle, supra, 127 N.J. Super. at 517.
It is abundantly clear that respondent was not operating any sort of business herself while petitioner and Uresal were cleaning her house. Respondent was simply a customer and a homeowner. She wanted her house cleaned by a third party while she was pregnant. The service provided by petitioner and Uresal was not integral to any "regular business" of respondent. Moreover, there is scant proof in the record of "substantial economic dependence" by petitioner upon respondent. The modest $60 biweekly charge paid by respondent and divided between petitioner and Uresal was incremental to the revenues that they were receiving from their other cleaning customers. On the whole, the judge had a sound basis to conclude that the "relative nature of the work" test was not satisfied here.
Despite her self-evident failure to meet the traditional legal tests for employee status, petitioner urges that we reverse the compensation judge's decision for policy reasons. She notes that housecleaners such as herself typically are low-income persons, do not have insurance, and are normally unable to withstand the financial burdens caused by a serious work-related injury. That all may be true, but it is not our function as a court to rewrite the worker's compensation statutes based upon our own public policy preferences. See D'Annunzio v. Prudential Ins. Co. of Am., 192 N.J. 110, 119-20 (2007).
Moreover, treating household cleaners who are in informal or start-up businesses as employees of their homeowning customers could lead to untoward consequences. Such homeowners, if deemed to be employers, might also be deemed liable to fulfill other duties of employers, such as deducting payroll taxes and being liable for unemployment compensation when and if they stop using the cleaners. It is up to the Legislature, not the judiciary, to weigh these policy ramifications. Flick v. PMA Ins. Co., 394 N.J. Super. 605, 614 (App. Div. 2007). This is not to say, however, that certain domestic servants cannot qualify for benefits as employees, where the legal tests for employment have been, unlike here, satisfied. See, e.g., Gerhardt v. Cont'l Ins. Cos., 48 N.J. 291, 298 (1966) (holding, in part, that domestic employees are not completely excluded from the Workers' Compensation Act); Gunther v. Metro. Cas. Ins. Co., 33 N.J. Super. 101, 113-14 (Law Div. 1954) (similarly holding that domestic employees are not excluded, per se, from the Workers' Compensation Act).
Lastly, we find inapposite petitioner's reliance upon insurance statutes that require homeowners insurers to include workers' compensation coverage for domestic workers injured while on the insured's premises. See N.J.S.A. 17:36-5.29, -5.30. The existence of those insurance coverage statutes begs the fact-sensitive question of whether a particular domestic worker actually is or is not the homeowner's employee. In the present case, the issue is not whether there is insurance coverage available to respond to any liability to petitioner; rather, the issue is whether there is any such liability in the first place under the applicable legal definitions of employment.
The dismissal of appellant's petition is affirmed.