Opinion ID: 2638938
Heading Depth: 2
Heading Rank: 2

Heading: Employee v. Independent Contractor

Text: [¶26] Diamond B Services insists that Mr. Rohde was not entitled to pursue his claim for unpaid wages through the Department because he was an independent contractor rather than an employee. Diamond B Services argues, therefore, that the hearing officer's finding that Mr. Rohde was a salaried employee was not supported by substantial evidence. [¶27] For purposes of wage claims, employee is defined as any person who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee. Wyo. Stat. Ann. 27-4-501(a)(ii) (LexisNexis 2003). An independent contractor is one who, exercising an independent employment, contracts to do a piece of work according to his own methods and without being subject to the control of his employer except as to the result of the work. Combined Insurance Company of America v. Sinclair, 584 P.2d 1034, 1043 (Wyo. 1978) quoting Lichty v. Model Homes, 66 Wyo. 347, 211 P.2d 958, 967 (Wyo. 1949). Our case law provides significant guidance in differentiating between employees and independent contractors. [4] [¶28] The overriding consideration in distinguishing between master-servant relationships and employer-independent contractor relationships is the employer's right to control the means and manner of the work. See e.g., Stratman v. Admiral Beverage Corp. 760 P.2d 974, 980 (Wyo. 1988); Cline v. State, Dep't. of Family Services, 927 P.2d 261, 263 (Wyo. 1996); Noonan v. Texaco, Inc., 713 P.2d 160, 164 (Wyo. 1986). Such a right to control is a prerequisite of the master-servant relationship. Conversely, the absence of such a right of control is a prerequisite of an independent contractor relationship. Master-servant and independent contractor are thus opposite sides of the same coin; one cannot be both at the same time with respect to the same activity; the one necessarily negatives the other, each depending on opposite answers to the same right of control inquiry. Coates v. Anderson, 2004 WY 11, ¶7, 84 P.3d 953, 957 (Wyo. 2004). When a worker is an independent contractor, the employer is typically interested only in the results of the work and does not direct the details of the how the work is performed. Noonan, 713 P.2d at 166; Natural Gas Processing Co. v. Hull, 886 P.2d 1181, 1186 (Wyo. 1994). [¶29] When an express contract exists between the parties, it is important evidence in defining the relationship, although it is not conclusive of the issue. Coates , ¶14; Noonan, 713 P.2d at 164. Other factors which are important to the determination include: the method of payment, the right to terminate the relationship without incurring liability, the furnishing of tools and equipment, the scope of the work, and the control of the premises where the work is to be done. Stratman, 760 P.2d at 980; Combined Insurance 584 P.2d at 1043. Another factor to be considered is whether the worker devotes all of his efforts to the position or if he also performs work for others. Id. [¶30] With regard to the method of payment criterion, an independent contractor usually determines the price of his services and bills for his services on a regular basis. Noonan, 713 P.2d at 166, citing Simpson, 770 F.2d at 501; Combined Insurance, 584 P.2d at 1043. On the other hand, when the employer determines the worker's rate of pay and takes deductions out of his paychecks for federal income taxes, Social Security, and Medicare then a master-servant relationship is indicated. Id. We have said that payment of workers' compensation and unemployment insurance premiums by an employer suggests that the worker is an employee rather than an independent contractor. See In re: Claims of Naylor, 723 P.2d 1237, 1240-41 (Wyo. 1986); In re Reed, 444 P.2d 329, 330 (Wyo. 1968). Similarly, when a worker is eligible to participate in benefit programs such as retirement or insurance plans, as a result of his association with the employer, it suggests a master-servant relationship exists. Combined Insurance, 584 P.2d at 1043. [¶31] Applying these factors to the case at bar, we note first that there was no written contract between Diamond B Services and Mr. Rohde. Instead, when Diamond B Services was incorporated in June 2000, the parties entered into a verbal agreement in which Mr. Rohde worked as a mechanic on Diamond B Services' trucks. Some of the trucks were actually owned by Diamond B Services and others were leased by the company, but Mr. Rohde apparently worked on all of the trucks regardless of their ownership status. Diamond B Services paid Mr. Rohde $3,200 per month, in bi-monthly payments of $1,600, and Randy Burry testified that Mr. Rohde was a salaried employee. There is no evidence that Mr. Rohde submitted any bills to Diamond B Services for his work or that he had control over the price of his services. Randy Burry stated that Mr. Rohde was expected to work all of the hours necessary to complete Diamond B Services' work and was not paid any overtime. Diamond B Services withheld deductions from Mr. Rohde's paychecks for federal income taxes, Social Security, and Medicare. [5] Mr. Rohde apparently participated in Diamond B Services' health insurance program and the company paid unemployment insurance premiums on him. [¶32] Diamond B Services did not set a work schedule for Mr. Rohde, but he generally worked from 7:00 a.m. to 6:00 p.m. on weekdays and half days on Saturday. Although Randy Burry testified that Mr. Rohde could come and go as he wanted, Diamond B Services kept track of Mr. Rohde's absences from work and expected him to get all of its work done. Mr. Rohde performed his mechanic services at one of three locations  a truck stop in Pine Bluffs, the Burrys' rented office/shop location in Pine Bluffs, or on the Burrys' ranch in Nebraska. Mr. Rohde and Randy Burry both testified that, in the interests of convenience, Mr. Rohde generally performed his mechanic work at the location where the truck was parked. Mr. Rohde's personal pickup was set up with equipment and tools to allow him to repair the trucks at the different locations. Although the record is unclear as to who owned or possessed the truck stop, the Pine Bluffs office/shop facility and the Nebraska ranch were specifically under Diamond B Services' control. Furthermore, it is abundantly clear that Mr. Rohde did not have control or possession of any of the three locations where he routinely performed his mechanical work. [¶33] The tools Mr. Rohde used while working for Diamond B Services were a combination of Mr. Rohde's private supply, Diamond B Services' tools, and Diamond B Casing's tools. Diamond B Services provided specialized equipment for him to perform his work, including a hoist, a welder, and a generator. The welder and generator were placed in the back of Mr. Rohde's personal pickup so that he could go to the trucks to repair them. Diamond B Services also furnished a card for Mr. Rohde to use for fuel purchases and allowed him to purchase automotive parts to use in the repairs on its accounts with various automotive parts dealers. [¶34] Randy Burry stated that Mr. Rohde worked on whatever he wanted and indicated several times that Mr. Rohde was performing mechanic work for other customers including Diamond B Casing (of which Mr. Rohde was a part owner) and D & B Trucking. Even though the trucks belonged to Diamond B Casing and D & B Trucking, they were leased to Diamond B Services. Although Randy Burry complained that Mr. Rohde did not fill out the paperwork correctly regarding these leased trucks, Mr. Rohde's mechanic work was performed at the request of, and for the benefit of, Diamond B Services. There is no evidence which suggests that Mr. Rohde was compensated by anyone other than Diamond B Services for his work. [¶35] Mr. Rohde testified that he typically visited with Randy Burry each evening to determine which trucks he would work on the next day. Randy Burry would meet with the truck drivers about the trucks and then either direct Mr. Rohde to perform the necessary repairs or maintenance or ask him to talk to the drivers to determine what work needed to be done. In addition, Diamond B Services obviously had the right to terminate Mr. Rohde's employment as it, in fact, exercised that right in December of 2002. [¶36] Although there were a few factors which support a finding that Mr. Rohde was an independent contractor, such as his use of his personal pickup and some of his own tools in the course of his employment, there was, obviously, a wealth of evidence to support the hearing officer's finding that Diamond B Services controlled Mr. Rohde's work. Randy Burry told Mr. Rohde which trucks to work on and Diamond B Services controlled, for the most part, the locations where he performed that work. Diamond B Services treated Mr. Rohde as an employee. The company set his rate of pay, took the typical employee deductions out of his check, allowed him to participate in its employee benefits programs, and, ultimately, exercised its right to terminate the employment relationship. The Department's determination that Mr. Rohde was an employee of Diamond B Services and was not an independent contractor was definitely supported by substantial evidence.