Luz LUKASIK, Petitioner–Respondent, v. Marguerite HOLLOWAY, Robert M. and Marilyn Nini, Respondents–Appellants.
In this workers' compensation case, the single issue we decide is whether petitioner, who was hired to clean respondents' house, was their employee or an independent contractor. Petitioner fell and injured her hand in the first hour of the first day of performing cleaning services for respondents, and she never personally cleaned their house again. Respondents appeal from the decision of the workers' compensation judge that petitioner was their employee and therefore entitled to workers' compensation benefits. Concluding that the judge misapplied the law, we reverse.
The relevant facts are not disputed. The only witnesses who testified at the trial were petitioner and her daughter. In December 2006, respondents contacted petitioner after receiving from an acquaintance petitioner's business card advertising cleaning services. At that time, petitioner was cleaning five or six other houses and one office building on a regular basis.
Petitioner and her daughter went to respondents' home to give “an estimate” for their cleaning services based on the size of the house and the services required. Because petitioner did not speak English, her daughter translated for her. Petitioner examined the house, and she told respondents what services she would provide and what services she would not provide. Specifically, she said she would not do laundry. There was a brief discussion of the possibility of doing laundry in the future but on a different day from the cleaning day. The parties agreed that petitioner would clean the house one day per week for $100 beginning at a date to be set by respondents. The specific day of the week was not discussed.
Several weeks later, one of the respondents contacted petitioner and arranged for her to do the first cleaning on January 16, 2007. Petitioner came to respondents' home with a friend and began cleaning, using supplies provided by respondents. She was not given any specific instructions about where to start or how to do the cleaning. Within the first hour, petitioner fell off a stool while dusting, and she injured her hand. One of the respondents called an ambulance to take her to a hospital for treatment.
In the days after the accident, petitioner resumed her cleaning services at other properties. Later, she made arrangements through her daughter to return to clean respondents' home. She came on one other occasion in the ensuing weeks after the accident. Before the second cleaning, her daughter told respondents that petitioner needed to purchase supplies, and respondents agreed to reimburse her for the cost. Petitioner came to respondents' home with her daughter and a friend. Because of her injured hand, petitioner could not personally clean the house. She supervised her daughter and the friend as they did the cleaning work. Subsequently, respondents failed to pay her for the cleaning and the supplies.
Petitioner filed a claim in the Division of Workers' Compensation on March 27, 2007, alleging work-related injury of her hand, arm, and nervous system as a result of the fall on January 16, 2007. Respondents filed an answer denying liability, in particular, denying that petitioner was their employee. The workers' compensation judge bifurcated the issues of liability and compensability. The judge heard testimony from petitioner and her daughter on July 30, 2009, and placed an oral decision on the record on February 4, 2010,1 concluding that petitioner was an employee of respondents under the so-called control test. The judge stated that respondents set the day for her to clean their house, they expected her to provide the services on a regular basis, and they had the ability to direct her cleaning work, although they did not actually control how she went about cleaning the house.
Through a later hearing conducted in June 2011, the judge found that fractures of petitioner's hand and wrist resulted in forty-five percent disability and entitled her to 110.25 weeks of compensation totaling $22,170.75. The judge also awarded $2,661 as respondents' share of petitioner's attorney's fees and other fees payable to the examining doctors and the court interpreter.
Respondents appealed. Following conference under our Civil Appeals Settlement Program, the matter was remanded to the compensation judge for additional findings. The judge issued a written decision on November 17, 2011, confirming his conclusion that petitioner was an employee of respondents but reducing the disability award to $7,717.50 and respondents' share of petitioner's attorney's fees to $926. The explanation for the reduction was that, since petitioner continued to clean for other clients after her injury, the award should be based on loss of wages of $100 per week rather than a full week's wages of $500.
On appeal before us, respondents argue that the compensation judge erred in concluding that petitioner was their employee within the meaning of N.J.S.A. 34:15–36. We agree.
In reviewing the application of the law to the undisputed facts in this case, we are cognizant that the compensation judge has expertise in this specialized field and is entitled to deference in making findings of fact. See, e.g., Close v. Kordulak Bros., 44 N.J. 589, 599 (1965); Perez v. Capitol Ornamental, Concrete Specialties, Inc., 288 N.J.Super. 359, 367 (App.Div.1996). “Deference must be accorded to the factual findings and legal determinations made by the Judge of Compensation unless they are ‘manifestly unsupported by or inconsistent with competent relevant and reasonably credible evidence as to offend the interests of justice.’ “ Lindquist v. City of Jersey City Fire Dep't, 175 N.J. 244, 262 (2003) (quoting Perez v. Monmouth Cable Vision, 278 N.J.Super. 275, 282 (App.Div.1994), certif. denied, 140 N.J. 277 (1995)). We defer to the compensation judge's decision on disability, provided that the factual findings are supported by substantial credible evidence in the record. Perez, supra, 288 N.J.Super. at 367.
Our scope of review is broader, however, “where the focus of the dispute is not on credibility but, rather, alleged error in the trial judge's evaluation of the underlying facts and the implications to be drawn therefrom ․” Manzo v. Amalgamated Indus. Union Local 76B, 241 N.J.Super. 604, 609 (App.Div.), certif. denied, 122 N.J. 372 (1990). We will reach our own legal conclusions where the record “ ‘leaves us with the definite conviction that the judge went so wide of the mark that a mistake must have been made․’ “ Ibid. (quoting C.B. Snyder Realty, Inc. v. BMW of N. Am., Inc., 233 N.J.Super. 65, 69 (App.Div.), certif. denied, 117 N.J. 165 (1989).
Under N.J.S.A. 34:15–36, an “employee” is:
synonymous with servant, and includes all natural persons ․ who perform service for an employer for financial consideration, exclusive of ․ casual employments, which shall be defined, if in connection with the employer's business, as employment the occasion for which arises by chance or is purely accidental; or if not in connection with any business of the employer, as employment not regular, periodic or recurring․
By contrast, an “independent contractor” has been defined as:
“one who, carrying on an independent business, contracts to do a piece of work according to his own methods, and without being subject to the control of his employer as to the means by which the result is to be accomplished, but only as to the result of the work.”
[Lesniewski v. W.B. Furze Corp., 308 N.J.Super. 270, 280 (App.Div.1998) (quoting Cappadonna v. Passaic Motors, Inc., 136 N.J.L. 299, 300 (Sup.Ct.1947), aff'd o.b., 137 N.J.L. 661 (E. & A.1948)).]
Two distinct legal tests have been applied in workers' compensation cases to determine whether a claimant is eligible for compensation as an employee or ineligible as an independent contractor: (1) the “control test” and (2) the “relative nature of the work test.” Lesniewski, supra, 308 N.J.Super. at 280; see Sloan v. Luyando, 305 N.J.Super. 140, 148 (App.Div .1997).
Under the control test, an employer-employee relationship exists when the employer retains the right to control not only what work is done but how the work is done. Lesniewski, supra, 308 N.J.Super. at 280; Pollack v. Pino's Formal Wear & Tailoring, 253 N.J.Super. 397, 408 (App.Div.), certif. denied, 130 N.J. 6 (1992). Courts typically consider several factors in assessing the presence or absence of control, including “evidence of the right of control, right of termination, furnishing of equipment, and method of payment.” Aetna Ins. Co. v. Trans Am. Trucking Serv., Inc., 261 N.J.Super. 316, 327 (App.Div.1993). The respondent need not have actually exercised control over the manner the work was done; the right to control the work is more determinative than actual control. Mahoney v. Nitroform Co., 20 N.J. 499, 506 (1956); Pollack, supra, 253 N.J.Super. at 408.
Here, respondents retained some control of petitioner's performance of cleaning services, such as when she would begin the cleaning work, but they did not control how she would do the cleaning, what supplies she would use, or, in fact, who would do the cleaning. There was no discussion of the specific day of the week that petitioner would clean respondents' home, although she assumed it would be the same day each week. Not only was there no evidence of petitioner's agreement to be subject to specific direction as to how to do her cleaning work, but petitioner dictated what work she was willing to do and retained the right to determine what supplies and equipment she would use. Petitioner was not even required to clean the house personally but had the ability to bring other workers to the job to perform the cleaning services.
Petitioner came to respondents' home with one or more helpers to do the cleaning. On the first date, she brought a friend. After petitioner injured her hand, she came with her daughter and a friend and supervised their cleaning of the house. She did not do cleaning work herself. An employee would not have the option to produce helpers or a substitute to do the employee's work. The fact that petitioner provided her services through others is strongly indicative of her role as an independent business owner and contractor who was working under a contract to clean respondents' home rather than as an employee. The fact that respondents agreed to pay a set price of $100 per cleaning rather than wages to each of the persons performing the cleaning work is further proof of petitioner's role as an independent contractor rather than an employee.
Also, petitioner purchased the supplies for the second cleaning and determined what equipment would be used, thus indicating the control that she retained over how she and her helpers would clean the house.
In his initial oral decision, the compensation judge emphasized that respondents retained the right to require additional work in the future, such as laundry, but the evidence was that petitioner stated she would not do laundry. The $100 per day price of the cleaning work did not include laundry or additional tasks. Any such additional work would have required further negotiations and an agreement as to compensation. That factor supports a finding that $100 per day was the price of the cleaning contract, not wages paid for petitioner's time, which respondents could have directed to other tasks.
We conclude that respondents did not control petitioner's work to the extent that an employer controls the work of an employee. The control test does not establish an employer-employee relationship.
The relative nature of the work test also does not support a finding that petitioner was an employee. Under that test, an employer-employee relationship exists if the evidence establishes a “substantial economic dependence” of the employee upon the employer and a “functional integration” of the employer's and employee's respective operations. Caicco v. Toto Bros., 62 N.J . 305, 310 (1973); Luyando, supra, 305 N.J.Super. at 148; see Rossnagle v. Capra, 127 N.J.Super. 507, 517 (App.Div.1973), aff'd o.b., 64 N.J. 549 (1974). Here, the evidence does not establish “substantial economic dependence” of petitioner upon respondents. Petitioner had other clients and continued to clean their premises and earn income from them. Furthermore, petitioner's cleaning of respondents' home was not an “integral part of the regular business” of the respondents. Pollack, supra, 253 N.J.Super. at 408; Rossnagle, supra, 127 N.J.Super. at 517. Respondents were homeowners who were clients of petitioner's business services.
The compensation judge commented about insurance statutes that require coverage of injuries suffered by domestic workers while on a homeowner's premises. See N.J.S.A. 17:36–5.29, –5.30. The fact-sensitive question of whether a domestic worker is an employee or an independent contractor is not controlled by the statutory requirements for insurance coverage. We do not determine here that a regular cleaning person is never considered an employee for purposes of workers' compensation and insurance statutes. Where the homeowner is not liable to pay workers' compensation benefits, the existence of insurance coverage does not alter application of the relevant workers' compensation statute as developed through the case law.
We conclude that the undisputed facts do not support the compensation judge's determination that petitioner was an employee of respondents. She was not entitled to a workers' compensation award.
1. Our record does not reveal the reason for the six-month delay in rendering a decision on the liability issue based on undisputed evidence.