[wiaattorneys] Re: Commission Only Sales Jobs or Independent Contractor Opportunities -- Three Ques

  • From: "Joseph Mueller" <JMuelle@xxxxxxxxxxxxxxxx>
  • To: <Mindy.Raymaker@xxxxxxxxxxxxxxx>, <jyeary@xxxxxxxxxxxxxxxxxx>, <Paul.Mason@xxxxxxxxxxxxxxxxx>
  • Date: Sat, 01 Oct 2005 13:43:18 -0500

In Illinois, we've advised against listing positions as "independent 
contractor" work, lest it appear as though we're making a pronouncement on 
whether the worker could qualify for benefits based on earnings from the job or 
the employer would be liable for contributions on those earnings.

With regard to the fee question, we have a state law that prohibits the ES from 
charging employers or job seekers fees.

Joe Mueller, Legal Counsel
Illinois Department of Employment Security
850 E. Madison, Third Floor
Springfield, Illinois 62702

>>> "Raymaker, Mindy (Sooni)" <Mindy.Raymaker@xxxxxxxxxxxxxxx> 09/29/2005 
>>> 12:04:57 PM >>>
In Florida, we have had an administrative case where the agency denied a job
listing on the basis that it was an independent contractor relationship
rather than employer-employee. In the particular case it was for jobs that
were questionable as to decency but fortunately we could fall back on the
independent contractor issue rather than getting into constitutional issues
surrounding topless/nude dancing etc.(in this case nude maids). The
administrative law judge upheld our interpretation of the W-P law.
Hope this helps.


From: wiaattorneys-bounce@xxxxxxxxxxxxx 
[mailto:wiaattorneys-bounce@xxxxxxxxxxxxx] On Behalf Of John L. Yeary
Sent: Thursday, September 29, 2005 12:57 PM
To: Mason, Paul (LABOR)
Cc: wiaattorneys@xxxxxxxxxxxxx 
Subject: [wiaattorneys] Re: Commission Only Sales Jobs or Independent
Contractor Opportunities -- Three Questions

Thank you, Paul.  Yours is the first response I received and so far, I've
come to the same conclusion regarding not locating specific prohibition.
Our USDOL representative says Wagner-Peyser should serve everyone, but the
definition of "employer" in the Act, and provision regarding use of 90% and
10% funds could be argued to point to a different conclusion.  I certainly
think that for placing job orders in the system and for federal reporting
purposes the employer-employee relationship must exist, but beyond that I am
not convinced Wagner-Peyser staff could not participate in providing
services to independent contractors.  For instance in Kansas the state
annually operates a seasonal wheat harvest program part of which involves
facilitating contact between independent "custom cutters" of the crop and
Kansas farmers that have wheat to be harvested.  We've never used WP funds
for fear of an audit exception but I'm not yet convinced it wouldn't be




-----Original Message-----
From: Mason, Paul (LABOR) [mailto:Paul.Mason@xxxxxxxxxxxxxxxxx] 
Sent: Thursday, September 29, 2005 11:00 AM
To: John L. Yeary
Cc: wiaattorneys@xxxxxxxxxxxxx 
Subject: FW: Commission Only Sales Jobs or Independent Contractor
Opportunities -- Three Questions


John - This is in response to your questions concerning providing services
to independent contractors through the job service system.  Although it is
implicit in the stated purpose in the regulations, I don't see anything that
prohibits it.  We were asked the same question by one of the WIBS.  I think
you raised the issue if it could be done on a fee-for-service basis.
Basically, our existing policies have not allowed it although they are
dated.  Our research indicates that the Wagner-Peyser grant used to not
allow charging of fees to supplement program income but now does allow it
for certain purposes beyond what is covered by the grant.  It's not always
clear what is part of the core grant and what can be considered in addition
to the services required under the grant so these issues might be
problematic.  The program staff have expressed some concerns about the types
and scope of orders that would potentially be placed by independent
contractors. By the way, America's Job Bank has the following statement:
"There must be an "employer-employee" relationship. A wage must be provided.
Our acceptance of commission only and independent contractor positions are
subject to the policy of the state in which you are located.  In general,
these types of relations do not meet the "employer-employee" relationship."
Did you find anything else out?




From: O'Keefe, Tim (LABOR) 
Sent: Wednesday, September 28, 2005 4:51 PM
To: Sewell, Valerie R (LABOR); Mason, Paul (LABOR)
Cc: Kelly, Mary (LABOR)
Subject: RE: Commission Only Sales Jobs or Independent Contractor
Opportunities -- Three Questions

It states in our Community Services Manual dated 9/27/96, Section 3050, that
we should not accept job orders where social security taxes are not paid by
the employer.  I am not sure if that has been updated.  The answer to the
question on servicing independent contractor positions was pulled from the
CSC Manual.  



From: Sewell, Valerie R (LABOR) 
Sent: Wednesday, September 28, 2005 3:50 PM
To: Mason, Paul (LABOR)
Cc: Kelly, Mary (LABOR); O'Keefe, Tim (LABOR)
Subject: Commission Only Sales Jobs or Independent Contractor Opportunities
-- Three Questions

Other than Wagner-Peyser is clearly structured to provide services to
employers, I can't find a specific prohibition against listing independent
contractor openings or commission-only sales positions.


Wisconsin job order policy states:


State law requires that all employees be paid at least minimum wage for all
covered employment regardless of the method of compensation.  A job order
should clearly state the method of compensation:  salary, salary plus
commission, straight commission (also known as commission only), performance
based, incentive, or piecework.  To be listed on JobNet, all job orders must
provide total compensation of at least the minimum wage for any hours worked
or spent in required training.  Federal, state, and local-municipal laws and
ordinances apply.  Apply the higher or most stringent law when there is a


Jobs that pay straight commission cannot be included if they only pay when a
product is sold, and do not guarantee the worker at least a minimum wage for
the hours worked.  Employers should be informed at the time of listing that
the minimum wage law applies.


If a job listing indicates that a draw against commission is received, the
job can only be listed on JobNet if the employer guarantees minimum wage for
the hours worked or spent in required training after the draw.  A draw is
usually compensation that has to be paid back to the employer by being
subtracted from future commissions.


Q.1  So I'm wondering if this same policy might be applicable in NYS (all
employees must be paid at least minimum wage)?



Wisconsin also had job order policy pertaining to Independent Contractor


The purpose of the public labor exchange is to facilitate employment.  Job
orders will only be accepted that offer employment opportunities where an
employer-employee relationship will exist.  Independent contractor
opportunities are self-employment, which represent business opportunities,
rather than employment .  The individual is responsible for paying his/her
own quarterly income taxes, disability insurance in lieu of Worker's
Compensation, Social Security taxes, Unemployment Insurance taxes, and other
such costs of doing business.  Such requests cannot be accepted as job


The regulatory citations mentioned were:


20 CFR 651.10, 20, 30 and 50 and USC 29 Section 49 (Wagner-Peyser Act)


20 CFR 651.10 still exists and includes a definition for "employer", but
there is no longer any 20, 30 or 50.  


Q. 2  Is there a way that you can find out what these old regulations
stated?   I'm wondering if they explicitly prohibited listing independent
contractor opportunities (that might tell us something if these regulations
were recently deleted), and


Q. 3  Would you interpret that the intent of Wagner-Peyser (which is FUTA
funded) was to provide services to job seekers and employers?  Is it
implicit that job orders should be listings for employers seeking employees?


Aside from this I would really worry about opening the public job bank to
including "business opportunities" - you can just read all the junk in the
classified ads of your local newspaper -- "Stuff envelopes at home and earn
$20,000 a year etc."   Where would you draw the line?  What about Amway,
Tupperware etc?  Can't imagine we would want to go there.  And if a customer
took one of these business opportunities listed as a "job order" , couldn't
they file a complaint with us?


And I gave you a copy of the AJB language stating it expected an
employer-employee relationship (but deferred to States' policy).




The specific question that we received from the Chautauqua Business Services
Team was:


In terms of job orders, can we post jobs that are commission-based or
independent contractors?  If not, why not?


The draft answer provided was from our procedure (I dropped off copy with
you so I'm not going to type all that here).


Maggie's comment was:  I am unclear why we don't accept job orders from
those seeking independent contractors.


Thank you!!








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