Opinion ID: 2647376
Heading Depth: 3
Heading Rank: 3

Heading: Services Performed Under a Written Contract

Text: Finally, Tennessee Code Annotated section 50-7-207(c)(11)(C) requires a real estate agent’s services to be “performed pursuant to a written contract between the individual and the person for whom the services are performed, and the contract provides that the individual will not be treated as an employee with respect to the services for federal tax (FUTA) purposes.” The record shows that Ms. Vukich-Daw entered into a written agreement to perform services as a time-share salesperson. The document was entitled “Independent Contractor Agreement New and Existing Commissioned Sales Agents” and provided that the independent contractor was being retained to sell interval ownership interests to prospective purchasers. The agreement further provided that the independent contractor would be compensated in the manner specified in Exhibit “A.” The document attached to the agreement is entitled “Affidavit” and contains the following attestations: 1. I have paid all of my own license fees and membership dues. 2. I am responsible for my own automobile and transportation expense, including insurance, without receiving any remuneration from the Broker. 3. I have paid all entertainment expenses or other expenses, incidental in obtaining or selling [sic] clients without receiving any reimbursement. 4. I have not been required by the Broker to maintain any specific schedule or attend any mandatory sales meetings, nor am I required to follow special procedures. 5. I may work as I see fir [sic], or not work if I choose. I am not obligated to have set office or working hours. 6. I may schedule vacations as I please and be off work as I see fit. 7. I have not been required to meet any sales quotas. 8. I have not received no [sic] minimum salary, sick pay or other fringe benefits. 9. I do not receive instructions from the Broker as to which customers or property I am to sell. 10. I pay my own income and FICA taxes. 11. I am not required to file reports with the Broker concerning my business conduct or status of sale. 12. My association with the Broker may be terminated by wither [sic] party at any time, upon notice given to the other, but the right of the party to any fees accrued prior to said notice shall now be divested by the termination of this agreement. -10- /s/ Cynthia Vukich Daw Ms. Vukich-Daw does not dispute that she executed the agreement and the attached Affidavit. Ms. Vukich-Daw also acknowledges that she received an IRS 1099 Form each year and was responsible for her own payroll taxes. We therefore conclude that these documents satisfy Tennessee Code Annotated section 50-7-207(c)(11)(C). Ms. Vukich-Daw maintains, however, that even if she satisfies section 50-7-207(c)(11)(C), this Court must nonetheless examine the validity of her agreement and determine, as did the Appeals Tribunal, whether Westgate treated her as an independent contractor or as an employee. We disagree. The Appeals Tribunal conducted both the common law and statutory tests for determining when a worker is an independent contractor or an employee. Both tests are referenced in the Employment Security Law. See Tenn. Code Ann. § 50-7-207(b)(2)(B) (indicating that an “included service” under section 207(a)(1) encompasses an individual who has the status of an employee “under the usual common-law rules applicable in determining the employer/employee relationship”) and Tenn. Code Ann. § 50-7-207(e)(A)-(C) (enumerating the elements of the statutory test for independent contractors, which is commonly referred to as the “ABC” test).5 These tests, however, are applied when determining whether the services are an “included service” under section 50-7-207(a)(1) and when the worker’s status as an employee or an independent contractor is relevant in making that determination.6 When a worker meets the criteria for any category of “excluded service” 5 Tennessee Code Annotated sections 50-7-207(e)(1)(A)-(C) provides that: Service performed by an individual shall be deemed to be an included service for the purposes of this section regardless of whether the common law relationship of master and servant exists, unless and until it is shown to the satisfaction of the administrator that: (A) The individual has been and will continue to be free from control and direction in connection with the performance of the service, both under any contract for the performance of service and in fact; (B) The service is performed either outside the usual course of business for which the service is performed or is performed outside of all the places of business of the enterprise for which the service is performed; and (C) The individual is customarily engaged in an independently established trade, occupation, profession or business of that same nature as that involved in the service performed. 6 The Appeals Tribunal employed the common law and statutory tests and concluded that Ms. Vukich-Daw was treated as an employee rather than an independent contractor and that she therefore performed an “included service” under section 50-7-207(a)(1). In doing so, the Appeals Tribunal determined that Ms. Vukich-Daw’s services did not fall within any category of “excluded service” under section (continued...) -11- under the Employment Security Law, the worker is considered a statutory non-employee, and any further inquiry is therefore irrelevant. To subject an excluded category of services to this second tier of scrutiny would render the exclusion meaningless. In this case, we have examined the findings of the administrative tribunals, the chancery court, and the Court of Appeals. We must ultimately decide, however, if the Board of Review’s findings were based on an incorrect interpretation and application of Tennessee Code Annotated section 50-7-207(c)(11). Because we have determined that a time-share salesperson is a licensed real estate agent under section 50-7-207(c)(11)(A), we must conclude that the Board’s decision to the contrary was in error. We further conclude that the administrative tribunals’ factual findings and legal conclusions relating to the application of the common law or statutory tests for determining whether a worker is an employee or an independent contractor are irrelevant and have no bearing on our determination of the applicability of Tennessee Code Annotated section 50-7-207(c)(11).