Enrichment v. Indus. Claim Appeals Office of State
| Decision Date | 19 December 2013 |
| Docket Number | Court of Appeals No. 12CA2326 |
| Citation | 339 P.3d 1046 |
| Parties | FOUNDATION FOR HUMAN ENRICHMENT, Petitioner, v. INDUSTRIAL CLAIM APPEALS OFFICE of the State of Colorado; and Division of Unemployment Insurance, Respondents. |
| Court | Colorado Court of Appeals |
OPINION TEXT STARTS HERE
Industrial Claim Appeals Office of the State of Colorado, DD No. 5463–2011.
Lapin Lapin, P.C., Theresa L. Corrada, Denver, Colorado, for Petitioner
John W. Suthers, Attorney General, Mary Karen Maldonado, Assistant Attorney General, Denver, Colorado, for Respondent Industrial Claim Appeals Office
No Appearance for Respondent Division of Unemployment Insurance
Opinion by JUDGE ROMÁN
¶ 1 In this unemployment compensation tax liability case, petitioner, Foundation for Human Enrichment (the Foundation), seeks review of a final order of the Industrial Claim Appeals Office (Panel). The issue on appeal is whether coordinator services performed by twenty-one individuals, who lived and worked out of state, for workshops offered by the Foundation, constituted covered “employment” for tax purposes under the Colorado Employment Security Act (CESA), sections 8–70–101 to 8–82–105, C.R.S.2013. The Panel concluded that the out-of-state coordinators were covered employees under the CESA and that the Foundation was responsible for paying unemployment compensation taxes for these individuals.
¶ 2 We conclude that respondent, the Division of Unemployment Insurance (Division), lacked statutory authority to impose tax liability against the Foundation with regard to the out-of-state coordinators. Consequently, we set aside the Panel's order and remand with instructions to reinstate the hearing officer's original decision determining that the out-of-state coordinators were not covered employees under the CESA for tax purposes.
¶ 3 The Foundation is a nonprofit organization based in Boulder, Colorado, that does outreach to victims of violence, war, and natural disasters. The out-of-state coordinators performed various administrative and clerical services for the Foundation in helping to organize workshops offered by the Foundation in out-of-state locations.
¶ 4 The Division conducted an audit of the Foundation and issued a notice of liability, finding that twenty-three workers, classified as coordinators, were in covered employment for purposes of the CESA. The Foundation appealed that decision.
¶ 5 Following a hearing, the hearing officer upheld the Division's ruling as to two workers who worked in Colorado. However, the hearing officer determined that twenty-one workers who lived and provided all their services to the Foundation out of state were not in covered employment for purposes of the CESA.
¶ 6 The Division appealed the hearing officer's ruling as to the twenty-one out-of-state coordinators to the Panel. The Panel determined that the out-of-state coordinators were in covered employment under the definition of employment in section 8–70–116, C.R.S.2013, and set aside the hearing officer's decision concluding otherwise. The Panel remanded for findings under section 8–70–115(1)(b), C.R.S.2013, regarding whether the out-of-state coordinators were free from the Foundation's control and direction and whether they were customarily engaged in an independent business.
¶ 7 On remand, the hearing officer found that the out-of-state coordinators were not customarily engaged in independent businesses providing event planning services. Thus, the hearing officer concluded, the coordinators were not independent contractors and they were in covered employment for purposes of the CESA.
¶ 8 The Foundation appealed that decision to the Panel. The Panel issued a final order affirming the hearing officer's decision.
¶ 9 In that order, the Panel upheld its prior determination that the out-of-state coordinators were in covered employment pursuant to section 8–70–116 because the coordinators both provided services and resided out of state. The Panel also rejected the Foundation's argument that section 8–70–117, C.R.S.2013, was applicable because none of the conditions set forth in that section had been satisfied.
¶ 10 The Panel agreed with the hearing officer's determination that the out-of-state coordinators were not independent contractors under section 8–70–115, C.R.S.2013, because they were not customarily engaged in independent businesses. The Panel also determined, although not specifically addressed by the hearing officer, that the undisputed evidence would support the conclusion that the out-of-state coordinators were subject to control and direction by the Foundation.
¶ 11 The Foundation then brought this appeal.
¶ 12 The Foundation contends that the Panel erred in determining that the out-of-state coordinators were in covered employment for purposes of the CESA. We conclude that the Panel's order must be set aside because the out-of-state coordinators' services to the Foundation were not “employment” under the CESA.
¶ 13 We may set aside the Panel's decision only if (1) the Panel acted without, or in excess of, its powers; (2) the decision was procured by fraud; (3) the findings of fact do not support the decision; or (4) the decision is erroneous as a matter of law. See § 8–74–107(6), C.R.S.2013; Colo. Div. of Emp't & Training v. Parkview Episcopal Hosp., 725 P.2d 787, 790 (Colo.1986). Our review of an agency's interpretation of a statute is de novo. Benuishis v. Indus. Claim Appeals Office, 195 P.3d 1142, 1145 (Colo.App.2008).
¶ 14 In construing a statute, we ascertain and effectuate the General Assembly's intent by applying the plain meaning of the statutory language, giving consistent effect to all parts of a statute, and construing each provision in harmony with the overall statutory design. In re Miranda, 2012 CO 69, ¶ 9, 289 P.3d 957. Additionally, statutes “pertaining to the same subject matter are to be construed in pari materia to ascertain legislative intent and to avoid inconsistencies and absurdities.” Walgreen Co. v. Charnes, 819 P.2d 1039, 1043 (Colo.1991).
¶ 15 Under the CESA, an “employer” must pay unemployment compensation premiums or taxes based on the amount of “wages for employment” paid to current employees and the amount of claims made by former employees. See §§ 8–76–101 to –103, C.R.S.2013; Colo. Div. of Emp't & Training v. Accord Human Res., Inc., 2012 CO 15, ¶ 12, 270 P.3d 985. “Employment,” in turn, is defined in the CESA through a number of statutory provisions. See § 8–70–103(11), C.R.S.2013 (listing these provisions).
¶ 16 The CESA contains two statutes that address whether an individual's services are covered employment and the Division's respective authority to impose unemployment compensation taxes. See §§ 8–70–116, –117; see also § 8–76–101 ().
¶ 17 Section 8–70–116, which is entitled “Employment—location of services,” is geographically expansive and defines employment to include services “wherever performed within the United States” provided (a) “[t]he service is not covered under the unemployment compensation law of any other state” and (b) “the service is directed or controlled” from Colorado. § 8–70–116(1)(a)–(b), C.R.S.2013.
¶ 18 Section 8–70–117, which is entitled “Employment—base of operations,” provides that a worker is in covered employment if one of four conditions exists: (1) the entire service of an individual is performed within this state; (2) the entire service of an individual is performed both within and without this state if the service is localized in this state; (3) the service is not localized in any state but some of the service is performed in this state and the base of operations or, if there is no base of operations, the place from which the service is directed or controlled, is in this state; (4) the base of operations or place from which the service is directed or controlled is not in any state in which some part of the service is performed but that the individual's residence is in this state. Section 8–70–117 then provides: “For purposes of this section, service shall be deemed to be localized within a state if the service is performed entirely within the state or if the service is performed both within and without the state but the service performed without the state is incidental to the individual's service within the state....”
¶ 19 The test set forth in section 8–70–117 is based on a uniform definition of “employment” that was developed in the 1930s and eventually adopted by nearly every state. See Beverly Reyes, Note, Telecommuters and Their Virtual Existence in the Unemployment World, 33 Hofstra L.Rev. 785, 790 (2004) (hereinafter Telecommuters ) ( that forty-six states and the District of Columbia have adopted the uniform definition); Laub v. Indus. Claim Appeals Office, 983 P.2d 815, 817–18 (Colo.App.1999) (); see also St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 775 n.3, 101 S.Ct. 2142, 68 L.Ed.2d 612 (1981) (). This definition was intended to eliminate uncertainty with regard to which state's unemployment compensation laws would apply to the payment of benefits and assessment of taxes when a worker performed services for a single employer in a number of states. See Laub, 983 P.2d at 817–18; Iverson Constr., Inc. v. Dep't of Emp't Servs., 449 N.W.2d 356, 359 (Iowa 1989).
¶ 20 The uniform definition is...
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