B.C.D; 01-25

. MAR 0 8 2001

Employer Status Determination

Employee Service Determination

Adecco Employment Services, Inc.

This is the decision of the Railroad Retirement Board regarding the status of Adecco

Employment Services, Inc., as an employer under the Railroad Retirement and

Railroad Unemployment Insurance Acts. The following information was provided

by Mr. Scott J. Rynearson, Assistant General Tax Counsel. The Burlington

Northern and Santa Fe Railway Company (BNSF).

Adecco is an employment agency engaged in the business of providing staffing for

the temporary clerical and administrative support, light industrial, and accounting

needs of its customers. Adecco currently has approximately 600,000 employees

through 4,500 offices in 60 countries. Since May 31, 1996, Adecco has provided

individuals to perform “temporary clerical and administrative support assistance”

services for BNSF1. Currently three Adecco employees perform services as

administrative assistants at BNSF's San Bernardino facility. A fourth is a file

clerk. Adecco also provides individuals for BNSF at eight other facilities and is

currently providing 74 individuals for BNSF.

Mr. Rynearson states that "BNSF managers determine what work needs to be done

and, where appropriate, the priority of the work. How the work is completed,

however, is a matter left to the expertise and discretion of the Adecco employee and

his or her Adecco supervisor.” He describes the work involved as follows:

Work products of the Adecco employees are those generally associated with

administrative support/clerical functions. They include the processing of

dictated letters, memorandums and spreadsheets, and the filing and physical

compilation of reports and records. Adecco employees do not author the

letters, memorandums, spreadsheets or reports they process.

He states that Adecco “oversees associate work by various methods depending on

the assignment location. There is an on-site [Adecco] supervisor located at Fort

Worth. Texas, due to the relative number of assigned workers at that location.

However, at locations where on-site [Adecco] supervision is not practical or cost

effective, the associate is monitored from a nearby branch office location.”

1 Mr Rynearson provided a copy of a contract dated April 1. 1999. entered into between Adecco and

BNSF '
Employer Status Determination

Employee Service Determination

Adecco Employment Services, Inc.

Section 1(a)(1) of the Railroad Retirement Act (45 U.S.C. § 231(a)(1)), insofar as

relevant here, defines a covered employer as:

(i) any carrier by railroad subject to the jurisdiction of the

Surface Transportation Board under Part A of subtitle IV

of title 49, United States Code;

(ii) any company which is directly or indirectly owned or

controlled by or under common control with, one or more

employers as defined in paragraph (i) of this subdivision,

and which operates any equipment or facility or performs

any service (except trucking service, casual service, and

the casual operation of equipment or facilities) in

connection with the transportation of passengers or

property by railroad * * *.

Sections 1(a) and 1(h) of the Railroad Unemployment Insurance Act (45 U.S.C. §§

351(a) and (b)) contain substantially similar definitions, as does section 3231 of the

Railroad Retirement Tax Act (26 U.S.C. § 3231).

Adecco clearly is not a carrier by rail. Further, the available evidence indicates that

it is not under common ownership with any rail carrier nor controlled by officers or 

directors who control a railroad. Therefore, Adecco is not a covered employer under

the Acts.

This conclusion leaves open, however, the question whether the persons who

perform work for BNSF under its arrangement with Adecco should be considered to

be employees of the BNSF rather than of Adecco. Section 1(b) of the Railroad

Retirement Act and section 1(d) of the Railroad Unemployment Insurance Act both

define a covered employee as an individual in the service of an employer for

compensation. Section 1(d)(1) of the RRA further defines an individual as "in the

service of an employer" when:

(i)(A) he is subject to the continuing authority of the employer to

supervise and direct the manner of rendition of his service, or (B) he is

rendering professional or technical services and is integrated into the
Employer Status Determination

Employee Service Determination

Adecco Employment Services, Inc.

staff of the employer, or (C) he is rendering, on the property used in

the employer's operations, personal services the rendition of which is

integrated into the employer's operations; and

(ii) he renders such service for compensation * * *.

Section 1(e) of the RUIA contains a definition ofservice substantially identical to

the above, as do sections 3231(b) and 3231(d) of the RRTA (26 U.S.C. §§ 3231(b) and

(d)).

The focus of the test under paragraph (A) is whether the individual performing the

service is subject to the control of the service-recipient not only with respect to the

outcome of his work but also with respect to the way he or she performs such work.

The evidence submitted shows that BNSF's work is performed under the direction

of Adecco personnel. Accordingly, the control test in paragraph (A) is not met. The

tests set forth under paragraphs (B) and (C) go beyond the test contained in

paragraph (A) and would hold an individual a covered employee if he is integrated

into the railroad's operations even though the control test in paragraph (A) is not

met. However, under an Eighth Circuit decision consistently followed by the Board,

these tests do not apply to employees of independent contractors performing

services for a railroad where such contractors are engaged in an independent trade

or business. See Kelm v. Chicago. St. Paul, Minneapolis and Omaha Railway

Cornu any. 206 F. 2d 831 (8th Cir. 1953).

Thus, under Kelm the question remaining to be answered is whether Adecco is an

independent contractor. The evidence of record indicates that Adecco employs over

600,000 individuals through 4,500 offices in 60 countries. As mentioned above,

Adecco provides 74 individuals for BNSF. It is apparent that Adecco is in the

business of providing its services to many customers, only a small percentage of

which are for BNSF. Adecco is engaged in a recognized trade or business;

accordingly, it is the opinion of the Board that Adecco is an independent business.

Because Adecco engages in an independent business, Kelm would prevent applying

paragraphs (B) and C) of the definition of covered employee to this case.
Employer Status Determination

Employee Service Determination

Adecco Employment Services, Inc.

-4-

Accordingly, it is the determination of the Board that service performed by

employees of Adecco is not covered under the Acts.

CherryPT. Thomas

'l/TVj j QA.

V. M. Speakman, Jr.

Jerome F. Kever