Kirby v. Indiana Employment Sec. Bd., 2--373A66

CourtCourt of Appeals of Indiana
Citation40 Ind.Dec. 10,304 N.E.2d 225,158 Ind.App. 643
Docket NumberNo. 2--373A66,2--373A66
PartiesBessie KIRBY, d/b/a Kirby Beauty Salon, and Glayds Hellmich, d/b/a Little Charm Beauty Salon, Appellants, v. The INDIANA EMPLOYMENT SECURITY BOARD et al., Appellees.
Decision Date10 December 1973

Raymond B. Rolfes, William H. Robbins, Rolfes, Garvey, Walker & Robbins, Greensburg, for appellants.

Theodore L. Sendak, Atty. Gen., Robert E. Dwyer, Deputy Atty. Gen., Indianapolis, for appellees.

APPEAL FROM THE INDIANA EMPLOYMENT SECURITY BOARD.

HOFFMAN, Chief Judge.

This is a consolidated appeal by Bessie Kirby, doing business as Kirby Beauty Salon (Kirby), and Gladys Hellmich, doing business as Little Charm Beauty Salon (Hellmich), for a judicial review of decisions rendered by a Liability Referee of the Indiana Employment Security Board (Board) that they are liable for past contributions under the Indiana Employment Security Act.

Each appellant owns a licensed beauty shop located on the premises of gift shops which they repectively operate, but neither is a licensed beauty operator. It is their practice to lease booth space to licensed operators, with appellants supplying the necessary fixtures and large equipment and the operator supplying her own hand tools. Under the terms of the agreements, each operator agrees to adhere to professional standards of work, and to use the leased equipment with due care.

The operators pay a straight percentage of their gross receipts as rental for the space. Appellants withhold no social security or other taxes, do not have seniority rules, vacations, or sick leave, and pay no workmen's compensation for the operators. The operators make their own appointments and set their own hours, receive payment from their customers and pay to appellants a percentage of their gross receipts each week. The agreement is terminable on 30 days' written notice by either party.

Both Kirby and Hellmich were served by the Board with a notice and demand for payment of contributions as employers, plus interest and penalties, which had accrued from approximately 1968 to 1972. Each appellant protested to her individual notice and demand, and requested a hearing on such protest. The two cases were decided separately by a Liability Referee; however, Kirby and Hellmich join in this appeal from their respective adverse rullings.

The Act provides for payments to certain unemployed persons, which are financed through contributions required of those who are considered employers. Under the Act, the contributions 'accrue and become payable from each employer for each calendar year in which it is subject to this article * * * with respect to wages paid during such calendar year * * *.' IC 1971, 22--4--10--1, Ind.Ann.Stat. § 52--1534 (Burns Cum.Supp.1973). 1 Kirby and Hellmich must come within this portion of the Act to be liable at all for contributions under the Act. Necessarily, then, a construction of this portion of the Act either subjecting them to, or excluding them from, its terms must be made.

When construing a statute, the primary objective is to ascertain and effectuate the general intent of the Act, if possible. Engle v. City of Indianapolis (1972), Ind.App., 279 N.E.2d 827, 29 Ind.Dec. 602 (transfer denied). In the case at bar, the intent of the Act is best discovered by first examining the definitions the Legislature has supplied for the terms used in the Act. These definitions are binding on the court in making its construction of the Act, unless they are repugnant to the manifest intention of the Legislature. Town of Kewanna etc. v. Ind. Emp. Sec. Bd. (1961), 131 Ind.App. 400, 404, 171 N.E.2d 262.

The above quoted section of the Act requires contributions from 'employer.' The relevant portion of the Legislature's definition of this term reads as follows:

'ARTICLE VII--Employers

"Employer' * * * defined.--Prior to January 1, 1972, 'employer' means any employing unit which * * * has or had in employment, and/or has incurred liability for wages payable to, four (4) or more individuals * * *, and subsequent to December 31, 1971, * * * 'employer' means any employing unit which * * * has or had in employment, and/or has incurred liability for wages payable to, one (1) or more individuals * * * or any employing unit which in any calendar quarter in either the current or preceding calendar year paid for service in employment wages of one thousand five hundred dollars (1,500) or more. * * *'

IC 1971, 22--4--7--1, Ind.Ann.Stat. § 52--1531 (Burns Cum.Supp.1973).

Since liability for contributions under the first section of the Act quoted herein turns upon one's status as an employer, Kirby and Hellmich must fall within this definition to owe contributions under the Act.

Under the above definition, one may be an 'employer' only if he has or had persons in his 'employment.' The term 'employment', in its sense here pertinent, was defined by the Legislature in the Act as follows:

"Employment' defined.--'Employment', * * * means service * * * performed for remuneration of under any contract of hire, written or oral, expressed or implied.

'(a) Services performed by an individual for remuneration shall be deemed to be employment subject to this article * * * irrespective of whether the common-law relationship of master and servant exists, unless and until it is shown to the satisfaction of the board that (A) such individual has been and will continue to be free from control and direction in connection with the performance of such service, both under his contract of service and in fact; (B) such service is performed outside the usual course of the business for which the service is performed; and (C) such individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed; or is a sales agent who receives remuneration solely upon a commission basis and who is the master of his own time and effort.'

IC 1971, 22--4--8--1, Ind.Ann.Stat. § 52--1532 (Burns Cum.Supp.1973).

The Liability Referee who heard these cases found that the beauty operators working in Kirby's and Hellmich's shops were in 'employment' under subsection (a)...

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