43 P.S. 753(L)(2)(B) Interpretation
In Viktor v. Department of Labor and Industry, 586 Pa. 196, 892 A.2d 781 (2006), the Pennsylvania Supreme Court was asked to "determine whether individuals who drive limousines (Drivers) . . . for six limousine companies Appellees . . . are independent contractors or employees pursuant to Section 43 P.S. 753(l)(2)(B) of the . . . Law . . . . for the reasons that follow, we affirm the Orders of the Commonwealth Court that held Drivers are independent contractors . . . ." Id. at 199, 892 A.2d at 783.
The Pennsylvania Supreme Court addressed the second criterion of Section 4(l)(2)(B) of the Law, 43 P.S. 753(l)(2)(B), and determined:
The relevant word that we must analyze . . . is 'independent' . . . Webster's Third New International Dictionary defines 'independent' as, inter alia:
not dependent: as . . . not subject to control by others: not subordinate: self-governing, autonomous, free . . . not affiliated with or integrated into a larger controlling unit (as a business unit) . . . not requiring or relying on something else (as for existence, operation, efficiency).
Webster's Third New International Dictionary 1148 (1986).
"Dependent is defined as, inter alia, 'unable to exist, sustain oneself, or act suitably or normally without the assistance or direction of another . . . .: connected in a subordinate relationship: subject to the jurisdiction of another.' Id. at 604.
The Commonwealth Court did not rest its determinations solely on the fact that Drivers were free to work for more than one company. the court considered the facts that Drivers were hired on a job-to-job basis, could refuse any assignment, and were not dependent on Appellees limousine companies for ongoing employment . . . . Further, the court also specifically determined that Drivers suffered a risk of loss if expenses exceeded income . . . .
Neither the statute nor this Court requires an independent contractor to own all of the assets of his or her business or to bear on his or her own the full measure of financial risk of the enterprise. Rather, the unique facts of each case must be examined in order to resolve the question of employee versus independent contractor status . . . .
The record supports the holdings of the Commonwealth Court that Appellees limousine companies demonstrated that Drivers met subsection (b), for several reasons, including:
(1) the Drivers' ability to perform their services for more than one entity, including competitors, with no adverse consequences;
(2) the operation of their businesses and their ability to perform work did not depend on the existence of any one of the Appellees limousine companies;
(3) the fact that Drivers bring all necessary perquisites of providing driving services to limousine companies, even though they do not own the limousines or bear all of the financial risk. Id. at 218-223 and 229-30, 892 A.2d at 794-97 and 801-02.