Court Opinion

ID: 4689706
Source: CourtListenerOpinion
Date Created: 2021-05-25 14:09:53.562052+00
Date Added: 2024-06-11T08:04:55.777432
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
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     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-0936-19

THE DEVEREUX
FOUNDATION,

          Petitioner-Appellant,

v.

NEW JERSEY DEPARTMENT
OF LABOR AND
WORKFORCE
DEVELOPMENT,

     Respondent-Respondent.
____________________________

                    Argued April 27, 2021 – Decided May 25, 2021

                    Before Judges Haas, Mawla, and Natali.

                    On appeal from the New Jersey Department of Labor
                    and Workforce Development, Docket. No. 13-053.

                    Peter L. Frattarelli argued the cause for appellant
                    (Archer & Greiner, PC, attorneys; Peter L. Frattarelli
                    and Daniel J. DeFiglio, on the briefs).

                    Rimma Razhba, Deputy Attorney General, argued the
                    cause for respondent (Gurbir S. Grewal, Attorney
            General, attorney; Jane C. Schuster, Assistant Attorney
            General, of counsel; Rimma Razhba, on the brief).

PER CURIAM

      Petitioner the Devereux Foundation (Devereux) appeals from a September

26, 2019 Final Administrative Action of the Commissioner of the Department

of Workforce and Labor (the Department), finding Devereux responsible for

contributions under the New Jersey Unemployment Compensation Act, N.J.S.A.

43:21-1 to -24.4, (UCL), between 2002 and 2005. We affirm.

      We take the following facts from the record, which includes a hearing

before an administrative law judge (ALJ), whose decision the Department

reversed. Devereux is self-described as a "national non-[]profit agency that

provides treatment services to individuals, children, families, adolescents, and

adults with special needs, behavioral health, mental health, and developmental

disabilities." Devereux places children in therapeutic foster homes which serve

as short-term living solutions for minors. The homes are owned and occupied

by families who contract with it to serve as therapeutic foster parents.

      New Jersey received a federal grant, and beginning in 1999, contracted

with Devereux to develop a pilot program for Devereux "to recruit families and

to train them and to . . . provide oversight to work with kids who were referred

through the System of Care to the . . . program." The program works with

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                                        2
children and adolescents with "a history of aggression, . . . trauma, . . . abuse

and neglect, . . . substance abuse[,] . . . suicidal behavior, . . . [or running] away

from home." After a child is placed in a home, Devereux "provide[s] oversight,

. . . support, . . . always ha[s] a staff member on call seven days a week, [twenty-

four] hours a day[] in case there [is] an emergency[,] and . . . ensure[s] that the

family [is] adhering to the State regulations . . . ." As part of the oversight

process, Devereux staff visit the homes once per week. According to Devereux,

during placement, it has "'no right of control' over the therapeutic foster parents,

other than to ensure compliance with State regulations."

      Devereux "bills the State on a 'fee for service' basis, and receives a non-

negotiable . . . amount of money 'based on the number of children' placed with

therapeutic foster parents." Fifty percent of that is paid to the parents on a "[p]er

diem, per child" basis "[t]o reimburse them for costs associated with caring for

the kids." The reimbursement pays for the child's "allowance," food, utilities,

and other expenses for the home, all of which is set by State regulations. The

rest of the money is used for Devereux's overhead.

      Devereux cannot compel a parent to accept a placement. A foster family

can "reject a placement for any reason, including that the family is not equipped

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                                          3
to handle that child's behavior." During the 2002 to 2005 audit period, Devereux

issued therapeutic foster parents Internal Revenue Service 1099 forms (1099s).

      Devereux utilized "contractors" to repair and maintain its group homes

because it did not have a maintenance crew and issued these repairpersons

1099s. The number of repairpersons hired fluctuated from year-to-year as did

the compensation Devereux paid. Between 2002 and 2005, Devereux issued

approximately fifty-five 1099s, twelve of which reflected compensation

exceeding $5,000, and twenty-two for less than $1,000.

      Devereux also hired medical service providers, including mental health

professionals, to treat children during their placement. These individuals signed

"Independent Contractor Agreements" and their compensation was reflected in

1099s issued by Devereux. The number of medical providers paid by Devereux

fluctuated as did their compensation.

      Michael Bartholomew conducted the relevant audits on behalf of the

Department.    Because Bartholomew subsequently retired, Alan Handler, a

Redetermination Auditor, testified in this matter on behalf of the Department.

The audit was triggered when Evangeline Edwards, an agent of Devereux,

"issued a 1099 to [Dennis Guyton] who [then] tried to collect [d]isability

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                                        4
benefits." According to Bartholomew's review of Guyton's tax returns 1, he

earned between ninety-six and one hundred percent of his income from Edwards

between 2002 and 2004. Bartholomew's audit expanded to numerous other

individuals, whom he noted were "foster care helper[s]" who "help[ed] the foster

care parents handle the children in their home." Bartholomew concluded as

follows:

               Examination and       documentation     disclosed    the
               following . . . :

                     1. The individuals are under the direction
                     and control of the employer. The employer
                     hires the individuals, schedules their work
                     hours and is responsible for the quality of
                     their work.

                     2. The individuals perform their services
                     at the employer[']s location and they
                     perform services which are in the usual
                     course of business.

                     3.    The individuals do not have an
                     established business providing these
                     services to the public. They did not
                     advertise, have a business telephone listing
                     or a permanent place of business.

                     Based on the above[,] the individuals are deemed
               to be in covered employment as they did not meet the
               provisions of [N.J.S.A. 43:21-]19(i)(6)(A)[, ](B)[, and]
               (C).

1
    Guyton's tax returns identified him as a "[t]eaching parent."
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                                          5
     Following the Edwards audit, Bartholomew audited Devereux itself and

concluded as follows:

           Employer is a Not-For-Profit Corporation that provides
           treatment programs for emotional, behavioral[,] and
           developmental disabilities.      The employer paid
           individuals as subcontractors to provide the following
           services[:] repair and maintenance, foster care[,] and
           mental health services.

                  ....

                 . . . Examination and documentation disclosed the
           following. . . .

                 1. The individuals providing maintenance
                 services and mental health services were
                 under the direction and control of the
                 employer. They were instructed as to when
                 and where to perform the services. The
                 individuals who were paid as foster care
                 parents were assigned a consultant to
                 oversee compliance with established
                 criteria.

                 2. The individuals who provided services
                 as foster care parents and mental health
                 workers were performing services which
                 are in the usual course of business. The
                 employer is in the business of providing
                 mental health services.

                 3. The individuals did not have established
                 businesses providing these services to the
                 public. They did not advertise[,] have a
                 business telephone listing[,] or a

                                                                     A-0936-19
                                     6
                    permanent place of business. Foster care
                    parents are restricted from taking any
                    placement from any other foster care
                    organization while they are under contract
                    with Devereux.

                    Based on the above[,] the individuals are deemed
              to be in covered employment as they did not meet the
              provisions of [N.J.S.A. 43:21-]19(i)(6)(A)[, ](B)[, and]
              (C).

      Bartholomew concluded Devereux underreported contributions per

N.J.S.A. 43:21-19(g) and (i)(6) for the second quarters of 2002 through 2005,

resulting in a deficit of $77,561.95, which the Department assessed to Devereux.

Handler testified his independent review of the audit led him to the same

conclusion.

      In a written decision, the ALJ reversed the Department's assessment,

finding N.J.S.A. 43:21-19(i)(6)(A), (B) and (C) did "not apply to Devereux's

foster care providers, mental health personnel[,] and repair[persons]" because

Devereux did not pay remuneration to the foster parents.           The ALJ also

predicated the decision on the conclusion "Bartholomew, his supervising auditor

or either of the referring agencies" did not testify, and therefore Bartholomew's

report was hearsay. The ALJ rejected Handler's testimony because he "did not

oversee [t]he Bartholomew audit . . . [and] merely reviewed the documents

included in Bartholomew's reports . . . [and he] did not know what books or

                                                                           A-0936-19
                                         7
records Bartholomew reviewed in preparation of his report" and Handler never

met with Bartholomew or his supervisor to discuss the report . "Furthermore,

Handler admitted that the spreadsheets included with Bartholomew's reports

were not the New Jersey Department of Labor (NJDOL) standard forms and he

did not know who created them."

      The balance of the ALJ's opinion, which we need not discuss in detail

here, applied N.J.S.A. 43:21-19(i)(6)(A), (B) and (C), known as the ABC test,

to the foster parents and concluded Devereux had met all three prongs of the test

and was not responsible for the assessment. The ALJ did not conduct a similar

analysis for the repairpersons or the mental health providers.

      The Department filed exceptions to the ALJ's decision. The matter was

heard by the Commissioner of the Department who issued the September 26,

2019 final agency decision reversing the ALJ and upholding the assessment.

The Commissioner rejected the ALJ's finding the audit report was hearsay,

noting "administrative proceedings do not follow the stricter evidentiary ru les

of [the] Superior Court," and the ALJ had "ignored several important indicia of

reliability." The Commissioner found as follows: the audit conducted and the

records gathered by Bartholomew were in the normal course of the auditing

process; the records were provided by Devereux and the audited providers who

                                                                           A-0936-19
                                        8
did not question their reliability; Handler had gathered his own information and

conducted his own review of Bartholomew's audit, drawing his own

conclusions; the spreadsheets prepared by Bartholomew were self-explanatory

and the fact they were not on the Department forms "should not rob them of their

obvious probative value."

      Contrary to the ALJ's findings, the Commissioner concluded the payments

made by Devereux to the foster parents constituted remuneration under the UCL.

At the outset, the Commissioner noted the facts of Lester A. Drenk Behavioral

Health Center v. New Jersey Department of Labor and Workforce Development,

No. DOL 06-002, 2007 N.J. AGEN LEXIS 592 (May 25, 2007), a case in which

an ALJ found an employment relationship between a non-profit behavioral

health center and therapeutic foster care parents, was similar to Devereux's case.

      For example, both programs operated "through a contract with the State[,]

with the company then entering into a subcontract with families" which

"passe[d] State requirements on to the providers"; the therapeutic foster care

parents were "primary caregivers, with intensive supervision plans established

by a care management team,"; and the parents "utilize[d] some independent

judgment and must exercise independent judgment as a parent, nevertheless they

were not free of direction and control by" the programs because of similar

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                                        9
agreements. The Drenk ALJ found it was "'clear' that the therapeutic foster care

providers 'were paid by Drenk for services rendered in performing therapeutic

foster parenting services to children in need'" plus basic expenses of raising a

child.

         The Commissioner differentiated the Devereux therapeutic foster homes

from typical foster homes by citing the following:         Devereux's website; a

treatment home contract; an independent contractor agreement; a handbook for

a treatment home program; and an advertisement for a family care program —all

of which touted or explained the therapeutic services provided in the foster

homes. The Commissioner concluded the "therapeutic foster care providers

were doing far more than just providing children with a safe and nurturing

environment . . . [and] actively provided critical therapeutic services to children

and adolescents with medical, psychological, social, and emotional needs," such

as "helping to create a care plan; implementing a broad training curriculum to

help the children develop skills[,] . . . and teaching the children these skills

directly and by example . . . ."

         The Commissioner described six examples of the therapeutic model in the

record as follows:

              For example, an item from the Devereux website
              explains that therapeutic foster care providers "actually

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                                        10
serve as primary treatment facilitators, teaching
directly and by example" and "incorporate individual,
group and milieu therapies, as well as psychiatric
services, speech therapy, medical and nutritional
interventions, and pre-vocational training" to "help
these youth modify their behavior so they can return to
their own communities or independent living." In the
therapeutic foster care provider agreement between
Devereux and the Edwards family, it is specified that
the family "provide a therapeutic family environment
for child/adolescent clients placed by Devereux to help
the clients to achieve their individualized treatment
goals." The key concept here is "therapeutic" family
environment – the therapeutic foster care providers are
doing more than just ensuring that the children are fed
and clothed properly, they are teaching the children
"directly and by example . . . to modify their behavior."
To this end, the Edwards family was required to
"document observations of the client's behavior and the
therapeutic responses to the behavior on a daily basis."
The family was also required to "implement the home-
based treatment strategies of the client's ISP
[Individualized Service Plan] and/or JCR [Joint Care
Review]."

      As another example, in the 2006-2007 Devereux
treatment home contract, it states that therapeutic foster
care providers function as a team "to provide services
for individuals in the home," including "elements from
a variety of different positive behavioral health based
treatment models." The contract further states that
therapeutic foster care providers, acting as teachers,
"will implement a broad curriculum of skill training
that will enable the individuals to develop in many
areas so they may achieve their maximum potential and
become productive members of society." These skills
include "self-care, family living, independent living,

                                                             A-0936-19
                           11
academic skills, social skills, pre-vocational and
vocational skills, self-control, [and] recreation."

       As a third example, in an addendum to the 2003
independent contractor agreement between Devereux
and Joan Perry, it states that therapeutic foster care
providers "provide services utilizing the treatment
methods of the Devereux Family Care Program" and
"will teach the children a broad curriculum of skills that
will enable the children to achieve their maximum
potential and be reunited with their families in as short
a time as possible." Pursuant to an individualized
service plan, Perry was required to "teach the child
social, academic, and daily living skills," "improve the
child's ability to cope with problems in socially
acceptable ways," and "improve the child's ability to
develop positive relationships with adults and peers."
Perry was further required to "implement a broad
curriculum designed to teach the child new skills" in
the areas of self-care, pre-vocational and vocational
skills, academic skills, social skills, independent living,
recreation and leisure, family living, self-control, and
problem solving skills.            Substantially similar
requirements are included in Perry's 2004 and 2005
independent contractor agreement as well.

       As a fourth example, in Devereux's handbook for
its treatment home program, it instructs therapeutic
foster care providers to "provide a family style living
environment and teach the youth a broad curriculum of
skills that will enable the youth to achieve their
maximum potential." These skills include "concepts of
personal space and appropriate boundaries;" social,
academic, vocational, and self-care skills; and
"alternatives to inappropriate behaviors and how to
manage challenging behaviors." Therapeutic foster
care providers become a member of the care team for
each child, and must develop a treatment plan which

                                                              A-0936-19
                           12
            "identifies strengths and needs and goals and
            objectives" as well as "delineating each service the
            youth will receive in order to help them achieve their
            goals."

                   As a fifth example, in an undated advertisement
            for its Family Care program, Devereux indicated that it
            was "seeking caring adults to provide specialized
            services to children in the adults' own homes." As a
            sixth example, an undated press release announcing the
            opening of Devereux's Family Cam program stated that
            "the emphasis of the program is on teaching children
            the skills necessary for them to function effectively in
            their home and community."

      The Commissioner concluded the ALJ "did not adequately consider the

therapeutic services provided by therapeutic foster care providers to the children

[and that t]he payments received from Devereux were clearly for both these

therapeutic services as well as to cover the costs of housing the children." The

Commissioner therefore concluded "the payments to the therapeutic foster care

providers constituted remuneration under the UCL."

      The Commissioner also found the repair persons and mental health

professionals retained by Devereux received remuneration. He noted Devereux

hired forty-six repairpersons "to perform maintenance and repairs on

[Devereux's wholly owned or rented facilities throughout the State] during the

audit period, and paid each of them via a 1099." Devereux also hired fourteen

mental health professionals and similarly paid them via 1099s.

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                                       13
      Next, the Commissioner applied the ABC test to the foster parents, the

repairpersons, and the mental health providers.

      The Commissioner found the therapeutic foster parents followed State

guidelines, provided a stable home with food and clothing, and "provided

therapeutic services as needed in accordance with the goals and objectives set

forth in the care management plan." Therefore, the Commissioner concluded

Devereux did not meet part A of the ABC test and failed to establish the foster

parent homes operated free from its control or direction.

      The Commissioner found Devereux failed to meet part B of the ABC test.

Relying on Drenk, the Commissioner found "the services provided by

Devereux's therapeutic foster care providers are not outside of Devereux's usual

course of business" because the parents' "private homes . . . [were] extensions

of [Devereux's] place of business." Quoting Transworld Systems, Inc. v. New

Jersey Department of Labor, the Commissioner found the "analysis of [part] B

. . . must consider not only 'locations where the enterprise has a physical plant,'

but also where the employer 'conducts an integral part of the business.'" No.

DOL 96-039, 1998 N.J. AGEN LEXIS 661 at 6 (June 17, 1998).                     The

Commissioner concluded "the essence of Devereux's business is to deliver

therapeutic services in this way" and "[t]o hold otherwise would be to take an

                                                                             A-0936-19
                                       14
unduly restrictive view of the realities of the relationship between Devereux and

its therapeutic foster care providers."

      The Commissioner found the ALJ "erroneous[ly] read[]" part C by

holding the therapeutic foster parents have an "enterprise that exists and can

continue to exist independently of and apart from the particular service

relationship" merely because they must demonstrate another source of income

separate from reimbursements as part of the licensing process.               The

Commissioner concluded outside sources of income are "not relevant" to part C,

and the relevant inquiry was whether "they have outside sources of income from

providing therapeutic services." He concluded Devereux failed to meet part C

because there is "no evidence in the record to demonstrate [the foster parents]

'have an outside relationship with other entities to provide therapeutic foster-

parenting services,' or were 'conducting their own independently established

enterprises as providers.'"

      Because the ALJ made no findings regarding the repairpersons, the

Commissioner found the following facts: Devereux hired repairpersons because

it did not have a maintenance crew; Devereux did not control the tools they used

or the other individuals the repairpersons hired to help; Devereux verified they

had insurance but did not sign subcontractor agreements because they "had

                                                                           A-0936-19
                                          15
gotten burned several years ago with a litigation case on that"; Devereux did not

"advance business expenses" to the repairpersons and did not "withhold any

taxes or unemployment/disability contributions."

      Citing Carpet Remnant Warehouse, Inc. v. New Jersey Department of

Labor, 125 N.J. 567, 583-84 (1991), the Commissioner found Devereux failed

to meet part A because it did not show the repairpersons were

            "free to choose where and when to work, including
            working for other brokers or independently;" that they
            were "not obligated to comply with any rules, practices,
            or procedures" set by Devereux; that the firm exercised
            no supervision over them; that the firm provided no
            training; that the firm provided no supplies, equipment,
            or uniforms; or that the firm provided no fringe
            benefits.

      The Commissioner concluded Devereux met part B because "it [was] clear

that the repair[persons] were not performing services in the usual course of

Devereux's business, as the firm's business is not construction, maintenance, or

repair." However, the Commissioner concluded part C was not met, and citing

Carpet Remnant Warehouse, noted "a key element of the Part C analysis . . . is

whether the person providing services 'is dependent on the employer, and on

termination of that relationship would join the ranks of the unemployed.'" He

noted although the record contained only Schedule C tax forms "for a handful

of the approximately [forty-six]" repairpersons, it showed they "received the

                                                                           A-0936-19
                                      16
vast majority of their income from Devereux, which strongly indicates that they

were not truly independent contractors." The Commissioner found that as to the

other repairpersons whose Schedule Cs were not included in the record, there

was "no evidence . . . to establish that they were customarily engaged in an

independently established business, occupation or trade."

      The Commissioner also made findings regarding the mental health

providers.   He noted the record contained only the independent contractor

agreements between the mental health professionals and Devereux, which stated

Devereux "'shall have no right to control or direct the details, manner or means

by which [c]ontractor accomplishes' the contracted services" and testimony that

Devereux "believed" the providers "had other business interests outside" of

Devereux.    The Commissioner found "[t]he mere presence of a signed

independent contractor agreement does not end the ABC analysis" and citing

Carpet Remnant Warehouse, concluded Devereux failed to show it did not

control the mental health providers and therefore did not meet part A.

      The Commissioner found Devereux failed to meet part B because the

testimony indicated the providers "provided psychological evaluations of

'mostly folks in the group homes,' which were directly owned by Devereux,

rather than in the private homes of foster parents." Therefore, the Commissioner

                                                                          A-0936-19
                                      17
concluded the mental health providers worked in Devereux facilities. He also

concluded "[b]ecause of Devereux's greater responsibilities in its group homes,

including the need to provide relevant medical services, the services provided

by these professionals would not be outside the usual course of business."

      The Commissioner found "[t]he fact that these professionals had

professional liability insurance, and may have had other business interests, [was]

not enough to meet the [p]art C test." He noted the record contained only "a

handful" of the fourteen mental health providers' Schedule Cs, all of which

showed they "received the vast majority of their income from Devereux, which

strongly indicates that they were not truly independent contractors." As to the

Schedule Cs, which were not provided for the other providers, the Commissioner

concluded there was "no evidence . . . to establish that they were customarily

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

      Devereux raises the following arguments on this appeal:

            [Point 1:] The Commissioner erroneously concluded
            that the ABC test applied to therapeutic foster parents.

            [Point 2:]     Even if the ABC Test applies, the
            Commissioner's application of the ABC Test as the
            therapeutic foster parents was not supported by prior
            judicial decisions and would render existing judicial
            constraints meaningless.

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                                       18
      [A.]      The Commissioner's decision
      conflates State licensing requirements with
      "control."

      [B.] The Commissioner's finding that each
      therapeutic foster parent's privately-owned
      home was . . . an extension of Devereux's
      business sets the "impossible standard"
      previously rejected in Carpet [Remnant]
      Warehouse.

      [C.] The Commissioner's conclusion that
      therapeutic parents must establish "outside
      sources of income from providing
      therapeutic services" is not an accurate
      statement of the law.

[Point 3:] The State Has Failed to Prove Its Case With
Respect To Repairs/Maintenance and Other Medical
Providers.

                           I.

Appellate courts have a limited role in reviewing the
decisions of administrative agencies. We will not
reverse an agency decision unless it is "arbitrary,
capricious or unreasonable or is not supported by
substantial credible evidence in the record as a whole."
. . . Moreover, decisions of administrative agencies
carry with them a strong presumption of reasonableness
particularly in the exercise of its statutorily-delegated
responsibilities. . . . We cannot substitute our judgment
for that of the agency. . . . The burden of showing the
agency's action was arbitrary, unreasonable, or
capricious rests upon the appellant. . . . If we find
sufficient credible, competent evidence in the record to
support the agency's conclusion, then we will uphold
the agency's findings.

                                                            A-0936-19
                          19
            [Dep't of Ins. v. Universal Brokerage Corp., 303 N.J.
            Super. 405, 409-10 (App. Div. 1997) (citations
            omitted).]

      Furthermore, "where there is substantial evidence in the record to support

more than one regulatory conclusion, it is the agency's choice which governs."

In re Adoption of Amends. to Ne., Upper Raritan, Sussex Cnty., 435 N.J. Super.

571, 583 (App Div. 2014) (internal quotation marks omitted) (quoting Murray

v. State Health Benefits Comm'n, 337 N.J. Super. 435, 442 (App. Div. 2001)).

"If the Appellate Division is satisfied after its review that the evidence and the

inferences to be drawn therefrom support the agency head's decision, then it

must affirm even if the court feels that it would have reached a different result

itself." Id. at 584 (quoting Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 588

(1988)).

      Our scope of review is essentially limited to three inquiries:

            (1) whether the agency's action violates express or
            implied legislative policies, that is, did the agency
            follow the law; (2) whether the record contains
            substantial evidence to support the findings on which
            the agency based its action; and (3) whether in applying
            the legislative policies to the facts, the agency clearly
            erred in reaching a conclusion that could not reasonably
            have been made on a showing of the relevant factors.

            [In re Adoption of Amends., 435 N.J. Super. at 584.]

                                                                            A-0936-19
                                       20
                                     II.

     We note the general principles which inform our consideration of the

arguments raised on this appeal. According to our Supreme Court,

           the primary objective of the UCL is to provide a
           cushion for the workers of New Jersey "against the
           shocks and rigors of unemployment." . . . Because the
           statute is remedial, its provisions have been construed
           liberally, permitting a statutory employer-employee
           relationship to be found even though that relationship
           may not satisfy common-law principles.

           [Carpet Remnant Warehouse, Inc., 125 N.J. at 581
           (citations omitted).]

     The factors of the ABC test are as follows as follows:

           (A) Such individual has been and will continue to be
           free from control or direction over the performance of
           such service, both under his contract of service and in
           fact; and

           (B) Such service is either outside the usual course of
           the business for which such service is performed, or
           that such service is performed outside of all the places
           of business of the enterprise for which such service is
           performed; and

           (C) Such individual is customarily engaged in an
           independently established trade, occupation, profession
           or business.

           [N.J.S.A. 43:21-19(i)(6)(A), (B), and (C).]

     The Supreme Court has stated:

                                                                      A-0936-19
                                     21
                   The ABC test becomes applicable only after a
            determination that the service provided constitutes
            "employment," which is defined as "service * * *
            performed for remuneration under any contract of hire,
            written or oral, express or implied." N.J.S.A. 43:21-
            19(i)(1)(A). If the Department determines that the
            relationship falls within that definition, and is not
            statutorily excluded, see N.J.S.A. 43:21-19(i)(7), then
            the party challenging the Department's classification
            must establish the existence of all three criteria of the
            ABC test. Conversely, the failure to satisfy any one of
            the three criteria results in an "employment"
            classification. That determination is fact-sensitive,
            requiring an evaluation in each case of the substance,
            not the form, of the relationship.

            [Carpet Remnant Warehouse, Inc., 125 N.J. at 581
            (citations omitted).]

      N.J.S.A. 43:21-19(p) defines remuneration broadly as "all compensation

for personal services, including . . . the cash value of all compensation in any

medium other than cash." N.J.S.A. 43:21-19(o) defines wages as "remuneration

paid by employers for employment."           Therefore, wages constitute all

compensation paid by an employer for personal services in any medium.

                                      III.

      Devereux argues the Commissioner's erred because Handler lacked the

personal knowledge necessary to testify to the audits conducted by

Bartholomew.    It also asserts the payments to the foster parents were not

remuneration but "for both therapeutic services as well as to cover the costs of

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housing the children." We reject these arguments because there was substantial

evidence to support the Commissioner's findings.

       N.J.A.C. 1:1-15.5 states "hearsay evidence shall be admissible in the trial

of contested cases." However, "some legally competent evidence must exist to

support each ultimate finding of fact to an extent sufficient to provide assurances

of reliability and to avoid the fact or appearance of arbitrariness." Ibid.

       At the outset, we note Devereux's reliance on the ALJ's factual findings

and legal conclusions is misplaced because the ALJ's decision was not binding

on the Commissioner. In re Adoption of Amends., 435 N.J. Super. at 587.

Furthermore, as recited above, the Commissioner made detailed findings

rejecting the ALJ's decision to assign no weight to the audits, articulated several

reasons why the audits "should be given significant evidentiary weight[,]" and

explained why Handler's testimony regarding his review of Bartholomew's

audits showed the audits were reliable.

       The gravamen of Devereux's arguments regarding the Commissioner's

remuneration findings asks us to second-guess what is a highly fact-sensitive

analysis. We decline to do so because this is not our standard of review. Id. at

584.    Moreover, the Commissioner's detailed remuneration determination

explained why the therapeutic foster homes were not typical fostering

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environments, but delivered specialized services to meet the foster child ren's

needs. Given the broad definition of remuneration, the Commissioner's finding

was not plainly unreasonable and was based on substantial evidence in the

record.    Devereux's other arguments regarding remuneration, including its

reliance on non-binding case law and the New Jersey Resource Family Parent

Licensing Act 2, which Devereux conceded was inapplicable, lack sufficient

merit to warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).

                                       IV.

                                        A.

                 Application of the ABC test to the foster homes.

        Devereux argues the Commissioner's finding that the foster homes did not

meet part A of the ABC test was error because it did not control the foster parents

whom the ALJ found "enjoyed considerable autonomy regarding the details of

day-to-day supervision of foster children in their home." Devereux also points

to the therapeutic foster parent contracts, which stated Devereux was not

permitted to "exercise control or direction over the manner or method" of

parenting by the foster parents. Moreover, it asserts foster parents are not

compelled to accept children and may terminate the foster relationship at any

2
    N.J.S.A. 30:4C-1.1.
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time. Devereux notes it does not provide the foster homes with equipment and

only reimburses foster parents for their expenses.         It argues the evidence

presented by the Department showing "(1) certain important decisions regarding

care for foster children, e.g., licensing, approval of 'alternate' care givers, etc.

'flow through' Devereux and (2) Devereux ensures that parents adhere to State

regulations" was insufficient to prove it controlled the foster homes.

      We are unconvinced the foster parents' alleged autonomy, or the

contractual language proved Devereux did not control the placement of children

in their homes. The therapeutic foster homes operated by Devereux are unlike

traditional foster homes where a child's care after placement inside the home is

controlled by the foster parent who may confer with the Division of Child

Protection and Permanency (Division) to obtain services if needed. The facts

here demonstrated Devereux controlled the placement by directing and

implementing an intensive care program for the children during their placement.

      Devereux argues the Commissioner's part B findings regarding the foster

homes was incorrect because the private homes of therapeutic foster parents

were extensions of Devereux's business. Citing Carpet Remnant Warehouse,

Inc., Devereux argues the standard in part B should refer "only to those locations

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where the enterprise has a physical plant or conducts an integral part of its

business."

      As the Commissioner noted, the analysis under part B "must consider 'not

only locations where the enterprise has a physical plant,' but also where the

employer conducts an integral part of the business." Clearly, the essence of

Devereux's mission is to place children in therapeutic foster homes. Therefore,

the Commissioner's finding the foster homes were extensions of Devereux's

business was supported by the evidence in the record and Devereux's arguments

to the contrary are unconvincing.

      Devereux argues the Commissioner's finding it failed to meet part C of

the ABC test was error because N.J.S.A. 43:21-19(i)(6)(C) states services

provided for remuneration are employment unless it is shown the "individual is

customarily engaged in an independently established trade, occupation,

profession or business," not that the work must be of the "same nature."

Devereux argues because the Legislature is currently considering this exact

change, but has not yet adopted it, if we affirm the Commissioner's interpretation

of the statute, it will violate legislative intent by inserting terms the Legislature

intentionally excluded. Devereux also argues the Commissioner ignored the fact

that, by regulation, the foster homes must be independent because N.J.A.C.

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3A:51-5.1 requires a "resource family parent shall have sufficient income or

other means of financial support prior to the placement of a child, so that the

resource family parent is economically independent of board subsidy payments

from the [Division]."

      In Carpet Remnant Warehouse, Inc., the Court held "if the person

providing services is dependent on the employer, and on termination of that

relationship would join the ranks of the unemployed, the [part] C standard is not

satisfied." 125 N.J. at 585-86. Here, the evidence in the record showed the

foster parents earned the majority, if not all, of their income from Devereux.

Indeed, due to the therapeutic services deployed inside the foster homes,

Devereux's contracts with the foster homes stipulated a foster parent could not

be employed outside of the home without Devereux's permission. For these

reasons, the Commissioner's part C findings regarding the foster homes was not

erroneous.

                                       B.

   Application of the ABC test to the Repairpersons and Medical Providers .

      Devereux challenges the Commissioner's determination relating to the

repairpersons and medical providers by re-asserting its evidentiary arguments

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relating to Bartholomew's audit and Handler's competency to testify about it. As

noted, we have rejected these arguments.

      Notwithstanding the evidentiary arguments, Devereux asserts the

evidence the Commissioner did consider does not support his ruling. Devereux

argues "Bartholomew's report is incomplete" because "it is based on little more

than a review of 1099[]s" and includes no interviews, and "Schedule C tax forms

from only eight individuals [are] identified in his report."

      We reject Devereux's arguments because under the ABC test, Devereux

bore the burden of proof. As we noted, the Commissioner found Devereux failed

to meet parts A and C as to the repairpersons and failed to meet parts A, B, and

C as to the mental health providers. The Commissioner explained his ruling in

findings based on the evidence and we must defer to those findings because they

are supported by the record. In re Adoption of Amends., 435 N.J. Super. 584.

      Affirmed.

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