IN THE COMMONWEALTH COURT OF PENNSYLVANIA

A Special Touch, :

Petitioner :

:

v. : No. 1181 C.D. 2016

: Submitted: February 17, 2017

Department of Labor and Industry, :

Office of Unemployment :

Compensation Tax Services, :

Respondent :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE JAMES GARDNER COLINS, Senior Judge

OPINION 

BY PRESIDENT JUDGE LEAVITT1 FILED: August 23, 2018

A Special Touch, a beauty salon, petitions for review of an adjudication

of the Department of Labor and Industry (Department) that imposed an 

unemployment compensation tax on it for five persons who worked at the salon in a 

variety of positions. In its adjudication, the Department classified these five workers 

as employees, but it classified five other workers who worked there in similar 

positions as independent contractors. Because all ten workers were “customarily 

engaged in an independently established trade, occupation, profession or business” 

under Section 4(l)(2)(B) of the Unemployment Compensation Law (Law),2 we 

reverse the Department’s holding in that respect.

Background

A Special Touch (Salon) is a sole proprietorship owned by Colleen 

Dorsey (Owner) that offers nail, skin, massage and cosmetic services. On August 

 

1 This matter was assigned to the authoring judge on March 12, 2018.

2 Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §753(l)(2)(B). 
2

26, 2014, the Department’s Office of Unemployment Compensation Tax Services 

(Tax Services Office) notified Salon that it owed $10,647.93 in unemployment 

compensation taxes, with interest, for the period 2010 through the second quarter of 

2014.3 The assessment notice asserted that ten persons who worked at Salon during 

that period of time were employees and subject to the unemployment payroll tax. 

Salon petitioned for a reassessment, on which the Department conducted a hearing 

on January 12, 2015. 

In the course of the reassessment proceeding, the Tax Services Office 

conceded that three of the workers had been incorrectly classified as employees. The 

three included one licensed cosmetologist and two others who did occasional 

cleaning and babysitting services. This left the status of the seven remaining workers 

in contest. Two worked as massage therapists; two worked as nail technicians; one 

did cleaning and maintenance work; one did babysitting, cleaning and laundry work; 

and one did babysitting and cleaning work. In its adjudication, the Department 

 

3 Section 304(a)(1)-(2) of the Law provides, in pertinent part:

Each employer shall file with the department such reports, at such times, and 

containing such information, as the department shall require, for the purpose of 

ascertaining and paying the contributions required by this act.

(a)(1) If any employer fails within the time prescribed by the 

department to file any report necessary to enable the department to 

determine the amount of any contribution owing by such employer, 

the department may make an assessment of contributions against 

such employer of such amount of contributions for which the 

department believes such employer to be liable, together with 

interest thereon as provided in this act.

(2) Within fifteen days after making such assessment the department 

shall give notice thereof to such employer as provided in paragraph 

(3). If such employer is dissatisfied with the assessment so made he 

may petition the department for a re-assessment in the manner 

herein prescribed.

43 P.S. §784(a)(1)-(2).
3

concluded that the massage therapists were independent contractors and, 

accordingly, granted Salon’s reassessment as to them. With respect to the five 

remaining workers, the Department acknowledged it was a “close case.” 

Department Adjudication at 33; Reproduced Record at 36a (R.R. ___). In the end, 

it concluded that the two nail technicians and the three who did occasional 

babysitting, cleaning and laundry work at the Salon were employees, not 

independent contractors.

In reaching its conclusion, the Department made extensive findings of 

fact, and they are not disputed by Salon. In 1999, Owner bought the building with 

an operating salon on the first floor. She lives upstairs. Before Owner bought the 

operating salon business, it employed 10 to 15 persons, who were treated as

employees for purposes of the unemployment payroll tax. Owner continued this 

business model until approximately 2005, when she closed down Salon. In 

approximately 2007, Owner reopened Salon under a “lease the space out” 

arrangement, by which the professional workers split their client payments with 

Salon. Sixty percent went to the professional worker, and forty percent went to 

Salon “to cover items such as electric, water, credit card fees and other overhead[.]” 

Department Adjudication at 3-4, Finding of Fact No. 10; R.R. 7a. Salon did not have 

written independent contractor agreements with any of the ten individuals whose 

work at Salon prompted the Department’s audit.

None of the ten workers who were the subject of the audit had their 

names listed on the exterior of the salon. Only one worker, one of the massage 

therapists, had business cards. All were responsible for maintaining professional

licenses, where applicable, and Salon did not provide any job training. All ten 
4

workers were free to work for others; had keys to the salon; and maintained their 

own schedules. 

Clients scheduled their appointments for professional services at Salon 

by directly calling the service providers, who had given their personal phone 

numbers to their clients, or by calling Salon. All appointments were maintained on 

Salon’s computer, regardless of how they were scheduled. Approximately 80% of 

Salon’s clients had “arrange[d] standing or regular appointments[.]” Department 

Adjudication at 5, Finding of Fact No. 19; R.R. 8a. The prices for Salon services

were agreed upon by both Salon and the professional workers. Salon collected the 

client’s payments, but the professional workers maintained a record of each

transaction to ensure an accurate split. Salon paid the professional workers “by 

business check weekly, biweekly, or semimonthly[,]” without any withholdings for 

income or other payroll taxes. Department Adjudication at 5, Finding of Fact No. 

23; R.R. 8a. Clients paid tips directly to the professional worker except where the 

client used a credit card to pay for the service and the tip. The professional workers

provided their own supplies and equipment.

Prior to the period covered by the assessment, Owner “let one person 

go” because she “did not feel that person was ‘a fit for this,’ and did not think ‘this 

is the space’ for that person.” Department Adjudication at 6, Finding of Fact No. 

25; R.R. 9a. Owner indicated to the Tax Services Office that she controlled who 

provided their services at Salon and could dismiss persons by ending their so-called 

lease arrangement. 
5

The two nail technicians, S.M. and V.D.,

4 have their own stations at 

Salon. Both appear on Salon’s website as members of “Our Team” and “Our trained 

and friendly staff[.]” Department Adjudication at 12, Finding of Fact Nos. 76, 79; 

R.R. 15a.

One nail technician, S.M., is Owner’s sister and had worked at Salon as 

an employee before it closed. When it reopened, S.M. agreed to work under the new 

lease arrangement. S.M. works on Wednesdays, when she may see two to four 

clients, and sometimes on Tuesdays; she averages $200 per week in earnings. She 

described her work at Salon as “a side activity – something she does [ ] to get out of 

the house[.]” Department Adjudication at 12, Finding of Fact No. 74; R.R. 15a. She 

provides her own equipment and collects her 60% share on a semi-monthly basis.

The other nail technician, V.D., began working at the Salon in 2011

while also working at two other locations. Over time, she brought all her clients to 

Salon, which is now the only place where she performs her services. She sets her 

own hours and provides her own equipment. 

The three “cleaning personnel” are G.S., C.S. and B.G. Their names 

do not appear on Salon’s website. G.S. works at an M&M factory and began doing 

part-time janitorial work at Salon in 2013 for a couple hours a week. He sets his 

own hours and hourly wage, and he bills Salon for his work. C.S. is a college student

and works at Red Robin; he does babysitting for Owner’s children as well as

cleaning and laundry duties for Salon. He works one to four days a week. He sets

his hours and hourly wage, and he bills Salon for his work. B.G. worked at Salon 

during the third quarter of 2012 during which time she also worked at a “temp 

 

4

In its decision dated June 16, 2016, the Department identified the individual workers at issue by 

their initials. R.R. 45a. The same method is used in this opinion.
6

agency[.]” Department Adjudication at 10, Finding of Fact No. 57; R.R. 13a. She 

babysat Owner’s children and did janitorial work. B.G. set her own hours and hourly 

wage, working one or two days a week, depending on need, and billed Salon for her 

work. 

The Department reviewed Salon’s reassessment petition under Section 

4(l)(2)(B) of the Law, which indirectly defines self-employed persons as those who 

are (1) free from control or direction over the performance of their services and are

(2) customarily engaged in an independently established trade or business. 43 P.S. 

§753(l)(2)(B).5 The Department found that all seven workers worked free from 

Salon’s control or direction, which satisfied the first prong. However, the 

Department concluded that under the second prong, two workers were independent 

contractors and five were employees of Salon. 

With respect to the massage therapists, L.M. and C.B., the Department 

concluded that they were independent contractors because they provided services in 

other places, i.e., in their clients’ homes. Further, L.M. had her own business cards. 

Because the massage therapists worked in more than one location, the Department 

concluded that they were engaged in an independent trade or business.

With respect to the nail technicians and cleaning personnel, the 

Department found otherwise. Because none provided nail or cleaning-type services 

at other places, they were found not to be engaged in an independent trade. The 

Department also reasoned that a person is not “customarily” engaged in a trade or 

business when he performs “isolated or sporadic jobs.” Department Adjudication at 

 

5 The full text of Section 4(l)(2)(B) appears in the opinion, infra. In actuality, Section 4(l)(2)(B) 

defines the meaning of “employment” under the Law and provides exceptions. It is these 

exceptions that indirectly define “self-employment,” a term that does not appear in Section 

4(l)(2)(B) of the Law.
7

17 (citing Minelli v. Unemployment Compensation Board of Review, 39 A.3d 593 

(Pa. Cmwlth. 2012)); R.R. 20a.6 

Accordingly, the Department granted Salon’s reassessment petition 

with respect to the two massage therapists, but it denied the petition with respect to 

the nail technicians and cleaning personnel. Salon then petitioned for this Court’s 

review. 

Appeal

On appeal,7 Salon argues that the Department erred in concluding that 

any of the five workers were its employees simply because they did not perform their 

services in locations other than Salon. Salon asserts that the Department erred in its 

reliance upon Minelli, 39 A.3d 593, because that case concerned whether a claimant, 

who is receiving unemployment benefits, becomes ineligible by doing occasional, 

short-term jobs. Minelli has application only in that circumstance. Salon argues that 

the true test of self-employment is whether the worker is able to work for others, not 

whether he actually does so. 

We begin with a review of the law. A putative employer challenging 

the assessment of unemployment compensation tax must satisfy the two-prong 

exception to employment set forth in Section 4(l)(2)(B) of the Law. Cameron v. 

Department of Labor and Industry, Bureau of Employer Tax Operations, 699 A.2d 

 

6

 In its adjudication, the Department stated that in Minelli, “Commonwealth Court has added to 

the Danielle Viktor test by requiring proof that the individual or claimant be ‘customarily engaged 

in such trade or business in order to be self-employed,’ as opposed to being engaged in isolated or 

sporadic jobs.” Department Adjudication at 17; R.R. 20a. The case referred to is Danielle Viktor, 

Ltd. v. Department of Labor and Industry, Bureau of Employer Tax Operations, 892 A.2d 781 (Pa. 

2006).

7 This Court’s scope of review determines “whether the necessary findings of fact are supported 

by substantial evidence, whether the Department committed an error of law, or whether the 

petitioner’s constitutional rights were violated.” Victor v. Department of Labor and Industry, 647 

A.2d 289, 291 n.1 (Pa. Cmwlth. 1994).
8

843, 845 (Pa. Cmwlth. 1997). Section 4(l)(2)(B) provides, in relevant part, as 

follows:

Services performed by an individual for wages shall be deemed 

to be employment subject to this act, unless and until it is shown

to the satisfaction of the department that--(a) such individual has 

been and will continue to be free from control or direction over 

the performance of such services both under his contract of 

service and in fact; and (b) as to such services such individual is 

customarily engaged in an independently established trade, 

occupation, profession or business.

43 P.S. §753(l)(2)(B) (emphasis added). 

Our Supreme Court has established a three-part test for determining 

whether the putative employee is engaged in “an independently established trade, 

occupation or business,” i.e., the second prong. Danielle Viktor, Ltd. v. Department 

of Labor and Industry, Bureau of Employer Tax Operations, 892 A.2d 781, 792 (Pa. 

2006). In determining the independent trade, it must be determined (1) whether the 

individuals are able to work for more than one entity; (2) whether the individuals 

depend on the existence of the presumed employer for ongoing work; and (3) 

whether the individuals were hired on a job-to-job basis and could refuse any 

assignment. 

Here, the Department conceded the first prong, so it need not be further 

addressed. On the second prong, the Department found that all five workers were 

allowed to provide services to anyone and that their work for Salon did not impede 

their ability to do so. However, because none of the five actually worked for others 
9

at other locations, the Department concluded that they were not “customarily” 

engaged in an independently established trade or business.

8

 

In so holding, the Department relied principally on Minelli, 39 A.3d 

593, which considered whether a claimant receiving unemployment benefits became 

ineligible under Section 402(h) of the Law,

9 43 P.S. §802(h), because she accepted 

a brief independent consulting position, which lasted about 22 hours over a threeday period. The Unemployment Compensation Board of Review (Board) held that 

this work rendered her ineligible by reason of self-employment. We reversed. We 

explained that a claimant’s occasional work was “not enough to demonstrate that 

[said individual] is customarily engaged in an independently established trade, 

occupation, profession or business.” Minelli, 39 A.3d at 598 (quoting Silver v. 

Unemployment Compensation Board of Review, 34 A.3d 893, 898 (Pa. Cmwlth. 

2011)). This Court further explained that the Minelli decision “in no way depart[ed]

from the three part test described by our Supreme Court in Viktor ... to determine 

whether one is engaged in an ‘independently established trade, occupation, 

profession or business.’” Minelli, 39 A.3d at 598. 

Here, the Department reasoned that Minelli “added to the Danielle 

Viktor test[.]” Department Adjudication at 17; R.R. 20a. This is an incorrect 

understanding of Minelli, which did not revise the Viktor test; indeed, we specifically 

so stated. Minelli, 39 A.3d at 598. Further, Minelli did not hold that an individual 

 

8 The concept of “work for others” differs for the two types of workers. The nail technicians 

provided professional services to clients, not to Salon, a sole proprietorship without a need for 

these services. The nail technicians performed their services only at Salon. The cleaning personnel 

all had other occupations or jobs, but they only did cleaning services for Salon. Stated otherwise, 

Salon was their sole customer. 

9 Section 402(h) provides in pertinent part: “[a]n employe shall be ineligible for compensation for 

any week ... [i]n which he is engaged in self-employment....” 43 P.S. §802(h). 
10

must actually work for multiple clients in order to be self-employed. Nor did it hold 

that one who works only on occasion is necessarily an employee. That an individual 

may be unsuccessful in obtaining other clients or is simply satisfied working for a 

single client or at a single location does not transform an independent contractor 

relationship into that of employer/employee. See C E Credits OnLine v. 

Unemployment Compensation Board of Review, 946 A.2d 1162 (Pa. Cmwlth. 2008).

Minelli arose under Section 402(h) of the Law, which renders a 

claimant receiving benefits ineligible if she sets up a business. It has nothing to do 

with the nature of the claimant’s employment relationship with her separating 

employer. By contrast, Section 4(l)(2)(B) of the Law considers the nature of the 

employment relationship between claimant and his separating employer. Ironically, 

the Law does not define “self-employment.” It is by the two-part exception to the 

definition of “employment” in Section 4(l)(2)(B) that the meaning of “selfemployment” has been explicated. Here, none of the workers at Salon is receiving 

unemployment benefits as a result of a separation from prior employment. This is 

not a Minelli case. The question is whether they are employees of Salon and subject 

to the unemployment compensation tax. 

Pasour v. Unemployment Compensation Board of Review, 54 A.3d 134 

(Pa. Cmwlth. 2012), is instructive. In Pasour, the claimant provided legal services 

to clients through an attorney referral company, known as Abelson. When his legal 

services were completed for a client to whom he had been referred, the claimant 

sought unemployment compensation, asserting that Abelson was his employer. The 

Board held that because he could do legal services for anyone and was free to refuse 

referrals from Abelson, he was customarily engaged in an independently established 
11

trade or business. On appeal, the claimant asserted that the holding in Minelli

required a different result. We rejected that argument, explaining:

Minelli is distinguishable. In Minelli, we held, based on Silver,

that a claimant, who is already receiving [unemployment 

compensation] benefits, is not disqualified as an independent 

contractor because the claimant subsequently accepts an 

occasional work offer on an as-needed basis. We stated, in 

Silver, “the fact that an unemployed person agrees to accept, and 

thereafter does accept, an occasional offer of work is simply not 

enough to demonstrate that said individual is customarily 

engaged in an independently established trade, occupation, 

profession or business.” Silver, 34 A.3d at 898.... Claimant, 

unlike the claimants in Minelli and Silver, was not already 

receiving [unemployment compensation] benefits as a result of 

his separation from his prior employment. Thus, the question is 

not, as it was in Minelli and Silver, whether the position with 

Abelson disqualified Claimant from receiving benefits for which 

he was already qualified and receiving, but whether the work 

Claimant performed for Client, via Abelson, is sufficient to grant 

[unemployment compensation] benefits in the first instance.

Pasour, 54 A.3d at 139 (emphasis added).

10

 

More recently, in Lowman v. Unemployment Compensation Board of 

Review, 178 A.3d 896 (Pa. Cmwlth. 2018), the Court considered whether a claimant, 

who was otherwise eligible for unemployment benefits, became ineligible by reason 

of his becoming an Uber driver. Consistent with Minelli, we held that the central

question in a Section 402(h) case is whether an otherwise eligible claimant has taken 

“a positive step to embark on an independent trade or business, thereby disqualifying 

himself for benefits.” Lowman, 178 A.3d at 902. 

 

10 Pasour supports the conclusion, here, that the licensed service providers, including the 

cosmetologist, the nail technicians and massage therapists, “work” for their clients, as opposed to 

working for Salon. As did Abelson, Salon provides space and makes referrals. It is not, however, 

a client of those services.
12

In sum, the Minelli analysis is used where the Department disqualifies 

a claimant receiving benefits from further compensation under Section 402(h) of the 

Law. Minelli is not instructive where, as here, the issue is an audit by the Tax 

Services Office of a putative employer’s business operations.

The Department’s reliance on Peidong Jia v. Unemployment 

Compensation Board of Review, 55 A.3d 545 (Pa. Cmwlth. 2012), is likewise 

misplaced. In that case, the claimant, a software programmer, worked under a 

consultant agreement. When his services were no longer needed, he applied for 

unemployment benefits and argued that he was eligible because he had no other 

business. This Court agreed that the claimant was eligible because he did not do 

programming services for any other customer and could not do so because his time

was fully consumed by a single employer.

This distinction was clarified one year later in Stauffer v. 

Unemployment Compensation Board of Review, 74 A.3d 398 (Pa. Cmwlth. 2013). 

There, a mother of three children petitioned for review of an adjudication of the 

Board, which held that she was an employer of an unemployment compensation 

claimant who babysat for her children. The claimant did not provide child care for

others, although she was not restricted from doing so. This Court reversed the Board, 

stating:

In Jia, this Court reversed a Board decision that the claimant was 

an independent contractor because the record showed that the 

claimant was required to report to the employer’s office, had an 

eight-hour work day schedule prescribed by the employer and 

needed to obtain the employer’s permission for any deviation 

from the time or place of work set by the employer, and this fixed 

schedule effectively precluded freedom to work for others.... 

Here, in contrast, the record showed that Petitioner did not 

control the time, place or manner of Claimant’s work and that 

Claimant was free to provide child care for others. 
13

Id. at 408 (emphasis added). We explained that the pertinent inquiry is whether the 

putative employer directly, or by the hours of work assigned, prohibits the putative 

employee from performing services for others. Neither applied in Stauffer. 

Accordingly, the “fact that Claimant did not happen to do any babysitting for others 

during the period in question is immaterial.” Id. at 407. 

Here, as in Stauffer, the five workers did their work for Salon at the 

times of their choosing. They were free to work for others and at different locations. 

Their hours were not such that they were precluded from doing nail and cleaning 

services for others. The Department specifically found as follows:

There appears to be little dispute that the individuals in question 

would have been able to perform services for more than one 

entity. Significantly, [Salon] did not use written contracts with 

these individuals [ ], and therefore, there was no evidence of any 

type of restrictive covenants limiting their ability in this regard. 

There was also nothing to suggest that the hours worked at 

[Salon] effectively precluded them from offering their services to 

others. [Salon] did not set their hours of work.... The nail 

technicians have their own stations at [Salon], and set their own 

appointments and schedule[.] Many of them, including the 

cleaning personnel, had other employment. 

Department Adjudication at 27; R.R. 30a (internal citations omitted) (emphasis 

added). Accordingly, the Department’s findings support the legal conclusion that 

the five individuals were independent contractors under Stauffer. 

In sum, the totality of the circumstances weigh in favor of finding that 

from 2010 to 2014 the five workers at issue in this appeal were customarily engaged 

in an independently established trade or business under the second prong of Section 

4(l)(2)(B) of the Law. They were able to work for more than one entity; were not 

limited by the nature of their work for Salon, or hours, to a single employer; and 
14

were not dependent upon Salon’s existence for ongoing work.11 Viktor, 892 A.2d 

781. The Department found that the “licensed providers were not hired by the job.” 

Department Adjudication at 30; R.R. 33a.12 However, all five individuals were able 

to refuse an assignment, which suggests an independent contractor relationship. 

Viktor, 892 A.2d at 797 (“It is difficult to fathom a situation where someone other 

than an individual engaged in his or her own business would possess the unmitigated 

prerogative to accept or reject assignments at will, to work only when he or she chose 

to, to substitute other workers of his or her choice when he or she chose not to 

complete an assignment, and to perform the services however he or she saw fit to do 

so.”). 

Conclusion

For the foregoing reasons, we conclude that Salon has satisfied each of 

the factors identified in Viktor and the two prongs of Section 4(l)(2)(B) of the Law. 

Accordingly, we hold that the Department erred in denying Salon’s petition for 

reassessment. The order of the Department is reversed insofar as it denied Salon’s 

reassessment petition with respect to the nail technicians (S.M. and V.D.) and 

cleaning personnel (G.S., C.S., and B.G.). The order of the Department is otherwise 

affirmed insofar as it granted Salon’s reassessment petition with respect to the 

massage therapists (L.M. and C.B.), as well as the three workers whom the Tax 

Services Office conceded are independent contractors. 

 _____________________________________

 MARY HANNAH LEAVITT, President Judge

 

11 To the extent the cleaning personnel were limited in their ability to accept more cleaning jobs,

this was because of their hours of employment with other entities, not their hours with Salon. 

12 This finding is confusing because the licensed providers were hired by their clients “by the job.”
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

A Special Touch, :

Petitioner :

:

v. : No. 1181 C.D. 2016

:

Department of Labor and Industry, :

Office of Unemployment :

Compensation Tax Services, :

Respondent :

O R D E R

AND NOW, this 23rd day of August, 2018, the Final Decision and Order 

of the Department of Labor and Industry, dated June 16, 2016, in the abovecaptioned matter, is hereby AFFIRMED in part and REVERSED in part consistent 

with the attached opinion. 

 ______________________________________

 MARY HANNAH LEAVITT, President Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

A Special Touch, :

Petitioner :

: No. 1181 C.D. 2016

v. :

: Submitted: February 17, 2017

Department of Labor and Industry, :

Office of Unemployment :

Compensation Tax Services, :

Respondent :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE JAMES GARDNER COLINS, Senior Judge

DISSENTING OPINION

BY JUDGE McCULLOUGH FILED: August 23, 2018

Because the three individuals (G.S., C.S. and B.G.) who performed 

occasional babysitting, cleaning/janitorial and laundry work for A Special Touch 

(Petitioner) and/or its owner were not “customarily” engaged in an independently 

established trade, occupation, business or profession, I respectfully dissent from the 

Majority’s determination that they are independent contractors. To so hold 

disregards the statutory requirement and runs afoul of the Supreme Court’s directive 

that the Unemployment Compensation Law (Law)1“requires the term ‘employment’ 

to be broadly construed to provide for the largest possible coverage of employees.” 

 

1 Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended. 
PAM - 2

Danielle Viktor, Ltd., v. Department of Labor and Industry, 892 A.2d 781, 795 (Pa. 

2006).

 “An individual receiving wages for his services is presumed to be an 

employee, and the employer bears a heavy burden to overcome that presumption.” 

Jia v. Unemployment Compensation Board of Review, 55 A.3d 545, 548 (Pa. 

Cmwlth. 2012). Petitioner failed to overcome this presumption or to establish that 

G.S., C.S., and B.G. were independent contractors. Our Supreme Court recognized 

that “a worker can be considered an independent contractor only if he or she is in 

business for himself or herself.” Danielle Viktor, Ltd., 892 A.2d at 798 (emphasis 

added). Section 4(l)(2)(B) of the Unemployment Compensation Law (Law)2 

provides the following two-prong test to determine if an individual is an employee 

or independent contractor,

(B) Services performed by an individual for wages shall 

be deemed to be employment subject to this act, unless

and until it is shown to the satisfaction of the department 

that—(a) such individual has been and will continue to 

be free from control or direction over the performance 

of such services both under his contract of service and 

in fact; and (b) as to such services such individual is 

customarily engaged in an independently established

trade, occupation, profession or business.

[3]

43 P.S. §753(l)(2)(B) (emphasis added). Section 4(l)(2)(B) of the Law creates a 

presumption that an individual working for wages is an employee (Resource 

Staffing, Inc. v. Unemployment Compensation Board of Review, 995 A.2d 887, 890 

(Pa. Cmwlth. 2010) and clearly requires that the individual must be “customarily 

 

2 Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended. 

3 As the Majority notes, the term “self-employment” is not defined in the Law. Hence, we 

look to the two-part exception to employment set forth in section 4(l)(2)(B) for guidance.
PAM - 3

engaged” in an independently established trade, occupation, profession or business 

to be an independent contractor. 

In Minelli v. Unemployment Compensation Board of Review, 39 A.3d 

593 (Pa. Cmwlth. 2012), we underscored the necessity of meeting this requirement 

while also recognizing the Supreme Court’s three-part test developed in Danielle 

Viktor, Ltd.4 As we held in Minelli, the Law requires that to be an independent 

contractor, the individual must be “customarily” engaged in a trade or business. 

The fact that an unemployed person agrees to accept, and thereafter does accept, an 

occasional offer of work is simply not enough to demonstrate that the individual is 

engaged in an independently established trade, occupation, profession or business. 

As such, an individual who performed a consulting job for approximately 22 hours 

over a period of 3 days was not self-employed, and therefore not eligible to receive 

unemployment compensation benefits, because she was not customarily engaged in 

an independently established trade, occupation, profession or business. Minelli.

In concluding that Minelli has no application in this case, the Majority 

overlooks the Law’s clear requirement that the individual must be customarily

engaged in an independently established trade or business. Minelli relied on our 

earlier decision in Silver v. Unemployment Compensation Board of Review, 34 A.3d 

893 (Pa. Cmwlth. 2011), which also addressed section 4(l)(2)(B) of the Law, albeit 

another case involving a disqualification under section 402(h) of the Law. In Silver, 

 

4 Our Supreme Court in Danielle Viktor, Ltd., established a three-part test for determining 

whether a putative employee is engaged in “an independently established trade, occupation, 

profession or business” under this second prong. Specifically, under Danielle Viktor, Ltd., we look 

at the following factors: (1) whether the individuals are able to work for more than one entity; (2) 

whether the individuals depended on the existence of the presumed employer for ongoing work; 

and (3) whether the individuals were hired on a job-to-job basis and could refuse any assignment. 

Id., 892 A.2d at 801-02. 
PAM - 4

we stated, “This Court has consistently held that, before a claimant will be declared 

to be self-employed, both elements of section 4(l)(2)(B) must be satisfied.” Id. at 

896. We noted that in Buchanan v. Unemployment Compensation Board of Review, 

581 A.2d 1005 (Pa. Cmwlth. 1990), this Court held that “the claimant’s conduct 

[selling jewelry at a flea market] did not reflect positive steps in embarking on an 

independent trade or business venture,” that such conduct was never intended to be 

on a permanent basis, and that it was merely an activity on the side to make extra 

money. Silver, 34 A.3d at 898. 

Ultimately, in Silver, we held that an individual who was receiving 

unemployment compensation benefits and providing telephone consultations on an 

intermittent, as-needed basis for a third party was eligible for benefits as she was not 

self-employed, i.e., she was not “customarily engaged in an independently 

established trade, occupation, profession or business.” Acceptance of “an occasional 

offer of work is simply not enough” to satisfy the second prong of section 4(l)(2)(B) 

of the Law. Silver, 34 A.3d at 898. The Majority holds that these cases are limited 

to disqualifying determinations under section 402(h) of the Law and do not apply in 

the analysis of whether an individual is engaged in an independently established 

trade, occupation, profession, or business. However, because both Minelli and Silver

form the basis of our precedent regarding application of the “customarily” engaged

standard, I must strongly disagree. To hold otherwise is to ignore the statutory 

language and, furthermore, creates two different tests to determine whether an 

individual is an independent contractor. 
PAM - 5

Further, Minelli recognized that the three-part test developed by our 

Supreme Court in Danielle Viktor, Ltd., did not address the customarily engaged 

element of the second prong.5 In fact, we expressly pointed out in Minelli that, 

this Court, in holding that the second element of Section 

4(l)(2)(B) has not been met under the facts of this case, is 

in no way departing from the three part test described by 

our Supreme Court in [Danielle Viktor, Ltd.] to determine 

whether one is engaged in an ‘independently established 

trade, occupation, profession or business.’ Rather, we are 

simply recognizing that the Law requires an additional 

element, that the claimant be customarily engaged in 

such trade or business in order to be considered selfemployed. This element was not discussed in [Danielle 

Viktor, Ltd.], or other cases which followed, because the 

persons found to be independent contractors in those cases 

were clearly engaged in ongoing business activities rather 

than an isolated or sporadic job(s).

Id., 39 A.3d at 598 (emphasis added). Indeed, the persons found to be independent 

contractors in Danielle Viktor, Ltd., were already recognized as being established 

limousine drivers who were engaged in ongoing business activities rather than 

isolated or sporadic jobs and there was no question as to whether they were 

customarily engaged in the same. Although Minelli involved a different procedural 

posture,6the facts therein clearly necessitated a review of section 4(l)(2)(B) of the 

Law and the three-part independent contractor test approved by our Supreme Court 

in Danielle Viktor, Ltd.

 

5

I agree with the Majority to the extent it stated that the Department’s decision incorrectly 

characterized Minelli as adding to the test in Danielle Viktor, Ltd. Minelli did not add to this test. 

It merely clarified the same. 

6 Namely, a question of whether an individual was disqualified from receiving 

unemployment compensation benefits under section 402(h) of the Law, 43 P.S. §802(h), as a result 

of that individual performing occasional work for a third party. Section 402(h) of the Law states 

that an employee shall be ineligible for compensation for any week “[i]n which he is engaged in 

self-employment.” 43 P.S. §802(h).
PAM - 6

Here, the Department found that G.S. performed part-time

cleaning/janitorial and maintenance work for Petitioner, did not have his own 

business, worked a regular job at the M&M factory, and picked up odds and ends 

jobs when he could. (Department’s Final Decision and Order at 8.) Clearly, the fact 

that G.S. does not have his own business and the work in question was classified as 

“odds and ends” precludes a finding that he is an independent contractor. Regarding 

C.S., the Department found that he was a college student who helped 

Petitioner/Petitioner’s owner with her children and with cleaning duties, and also

worked at the local Red Robin restaurant. Id. Regarding B.G., the Department 

found that she assisted Petitioner/Petitioner’s owner with babysitting and janitorial 

duties approximately one or two days a week and also worked for a temp agency. 

Id. at 9-10. 

 There were no findings by the Department as to whether these 

individuals were customarily engaged in any of these services or whether G.S., C.S., 

or B.G. depended on the existence of Petitioner for ongoing work. However, the 

Majority makes its own finding as to whether they depended on Petitioner for 

ongoing work in the negative. Nonetheless, this finding alone would not qualify 

G.S., C.S., or B.G. as independent contractors because there was no evidence they 

were customarily engaged in offering such services as part of an independently 

established trade, occupation, profession, or business.

As noted above, with regard to the second prong of the Danielle Viktor, 

Ltd. test, our Supreme Court has explained that “a worker can be considered an 

independent contractor only if he or she is in business for himself or herself.” 892 

A.2d at 798. Here, the Department recognized as much, stating that “the relevant 

inquiry seems to be whether [G.S., C.S., and B.G.] performed the same services 

as part of an independent business or for other businesses.” (Department’s Final 
PAM - 7

Decision and Order at 27-28.) The Department went on to conclude that such a 

“showing clearly was not made with respect to the three cleaning personnel in 

dispute: GS, CS, and BG.” (Id. at 28.) Moreover, the record indicates that these 

individuals occasionally worked for Petitioner as needed under a non-fixed schedule, 

and while each of these individuals worked other jobs, the other jobs were unrelated 

to the services they performed for Petitioner and, hence, do not show that they had 

independent businesses providing such services. 

 With respect to the final prong of this test, the record establishes that G.S., 

C.S., and B.G. could refuse any assignment, but only C.S. and B.G. were hired on a 

job-to-job basis. The nature of G.S.’s hiring was, at best, ambiguous in the record, 

which merely indicated that he performed janitorial work a couple of hours per week 

for Petitioner since 2013. The record is not clear if this work was steady each week 

or merely on an as-needed basis. 

 Based on this record, the Department correctly found there was 

insufficient evidence to conclude that G.S., C.S., or B.G. were in business for 

themselves offering babysitting, cleaning/janitorial, and/or laundry services to 

demonstrate that they were customarily engaged in an independently established 

trade, occupation, profession or business. Section 4(l)(2)(B) of the Law; Minelli. In 

reversing the Department’s order concluding that they were employees, the Majority

focuses only on the three-part test in Danielle Viktor, Ltd., to the exclusion of the 

“customarily” engaged statutory requirement and this Court’s precedent, and as such 

I must respectfully dissent

________________________________

PATRICIA A. McCULLOUGH, Judge