Opinion ID: 1696996
Heading Depth: 3
Heading Rank: 1

Heading: Plain language of statutes and case law

Text: When we review factual findings of a compensation judge, we will not disturb the findings unless they are manifestly contrary to the evidence presented. Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 60 (Minn.1984). However, if the controlling facts are not in dispute, the determination of whether a person is an employee is a question of law. Oelrich v. Schlagels, Inc., 426 N.W.2d 430, 433 (Minn.1988). Questions of law are reviewed de novo. Kliniski v. Southdale Manor, Inc., 518 N.W.2d 7, 9 (Minn.1994). Here, the controlling facts are not in dispute. The Workers' Compensation Act defines an employee as any person who performs services for another for hire   . Minn.Stat. § 176.011, subd. 9 (2000). [4] The definition includes a list of persons who are included as employees under the Act. Id. A voluntary uncompensated worker participating in a program established by a local social services agency is one such person. Id., subd. 9(10). Alcozer asserts that at the time of his injury, he was either an employeeperforming a service for hireor he was a voluntary uncompensated worker. The plain language of the Act and relevant case law support the conclusion that Alcozer is an employee under the Act. More specifically, the Act defines an employee as one who performs services for hire and Alcozer meets the three indicia of a contract for hire. First, Alcozer performed his labor in exchange for something because his receipt of public assistance is a function of his labor and Alcozer's labor is mandatory under the statute. Second, Alcozer was paid for his work within the meaning of the Act because he received public assistance, indicating that his work was not gratuitous. A person need not receive wages as compensation for labor to be an employee. Third, Alcozer voluntarily chose to work within the meaning of the Act. The fact that he would forego public assistance if he discontinued working does not make his labor compulsory because in all fields, one must work to receive compensation. Under the law of workers' compensation, a contract of hire is a requisite element of an employment relationship, indicating that labor is being performed in exchange for something of value and not gratuitously. Miller v. Federated Mut. Ins. Co., 264 N.W.2d 631, 635 (Minn.1978). A laborer whose receipt of payment is dependent on and in proportion to his or her labor should be considered an employee. 3 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 64.04 (2000). Compensation is often denied to a worker receiving public assistance on the theory that such a person would continue to receive the same assistance whether working or not and is therefore not an employee. Id. Nevertheless, a CWEP worker's receipt of public assistance is dependent on and in proportion to his labor. Work requirements under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and the Minnesota Family Investment Program of 1997 (MFIP) are mandatory, and failure to comply with work participation requirements results in either a pro rata reduction in the amount of assistance or termination of benefits. 42 U.S.C. § 607(e)(1) (Supp. V 1999); Minn.Stat. § 256J.55, subd. 1(c) (2000). Further, there is a 5-year lifetime limit on the receipt of assistance. 42 U.S.C. § 608(a)(7) (Supp. V 1999); Minn.Stat. § 256J.42 (2000). [5] The federal legislation authorizing the CWEP program put in place in Minnesota, as well as the state legislation continuing the program, are related to compensation at an hourly wage rate. The law limits the number of hours that a CWEP worker may work to the quotient of the applicable benefit rate divided by the federal or applicable state minimum wage rate. 42 U.S.C. § 682(f)(1)(B)(i) (repealed 1996); Minn.Stat. § 256J.67, subd. 4(d). After a CWEP worker has been assigned to a position for 9 months, the maximum number of hours are limited to the MFIP standard of need divided by the rate of pay for individuals employed in the same or similar occupations by the same employer at the same site. Minn.Stat. § 256J.67, subd. 4(d); accord 42 U.S.C. § 682(f)(1)(B)(ii) (repealed 1996) (using a similar calculation). While these provisions help to avoid displacement of regular public workers, [t]hese provisions, in effect, recognize[] that if the provision of public assistance justifie[s] the imposition of a work requirement, the extent of that requirement should be premised on the amount of assistance provided. Matthew Diller, Working Without a Job: The Social Messages of the New Workfare, 9 Stan. L. & Pol'y Rev. 19, 22 (1998). To satisfy the workers' compensation employee requirement that there is a contract of hire, there must be an element of payment. Under our previous case law, we have concluded that payment need not be pecuniary compensation if, in consideration of services, the employe [sic] receives from the employer any services, goods, or accommodations of substantial financial value such as farm work, fuel, heat, light, clothing, board, lodging, laundry, or tuition. Aleckson v. Kennedy Motor Sales Co., 238 Minn. 110, 116, 55 N.W.2d 696, 700 (1952) (involving the use of a car as compensation for services); accord Oelrich, 426 N.W.2d at 433 (involving on-the-job training as compensation); Krause v. Trustees of Hamline Univ., 243 Minn. 416, 419, 68 N.W.2d 124, 126 (1955) (involving room and board as compensation); Judd v. Sanatorium Comm'n, 227 Minn. 303, 307-08, 35 N.W.2d 430, 433-34 (1948) (involving room and board as compensation). Further, the fact that a workfare worker receives public assistance instead of wages does not mean that his or her labor is gratuitous. Cristello v. Township of Irondale, 195 Minn. 264, 265, 262 N.W. 632, 633 (1935) (stating that right to compensation not lost because worker was, at the time of injury, working out poor relief). Simply put, a workfare worker performs services in order to receive public assistance. A contract of hire also involves a voluntary choice of working. See 3 Larson & Larson, supra § 64.03. The fact that a workfare worker will forego relief if he discontinues working does not make his employment compulsory. In all fields of endeavor[,] work is a condition precedent to remuneration. County of Los Angeles v. Workers' Comp. Appeals Bd., 30 Cal.3d 391, 179 Cal.Rptr. 214, 637 P.2d 681, 685 n. 4 (1981) (quoting Thelma Brook & Harold M. Simon, Comment, Relief Workers and Workmen's Compensation, 36 Ill. L.Rev. of Nw. U. 773, 776 (1942)). [6] Moreover, federal employment statutes treat Alcozer as an employee. It is undisputed that federal legislation and corresponding regulations implementing CWEP attempt to make it clear that workfare placements are not jobs. See, e.g., 42 U.S.C. § 682(f)(1)(C) (repealed 1996). But federal regulations in place at the time CWEP was implemented in Minnesota required workers' compensation coverage or comparable protection. 45 C.F.R. § 251.2(b) (1995). The PRWORA of 1996 is silent on the issue, although the Department of Labor's position is that workfare workers are still considered employees for purposes of federal employment laws. U.S. Department of Labor, Department of Labor Guidance: How Workplace Laws Apply to Welfare Recipients, Daily Lab. Rep. (BNA) No. 103, at E 3 (May 29, 1997). Thus, even though the CWEP legislation and regulations attempt to classify workfare placements as something other than a job, workfare workers are considered employees for purposes of federal employment statutes. They should, therefore, be considered employees for purposes of state employment laws. Given that PRWORA and MFIP require public assistance recipients to work in exchange for their public assistance payments and place a 5-year lifetime limit on such assistance, workfare participants are essentially in the same position as other workers doing similar work for purposes of receiving workers' compensation. Therefore, I conclude that workfare participants are employees under the Workers' Compensation Act and are entitled to protection under the Act.