Employment: Leased Employees

Total Mechanical Heating & Air Condition, et al. v. ERD/UEF , 2002 MT 55 After UEF satisfied it's burden of proving absence of record of workers' compensation insurance coverage by either employee "leasing company" or "client companies," the employee "leasing" company and "client companies" failed to present "substantial credible evidence" that coverage in fact existed. WCC was correct in concluding that the evidence which persuaded DLI hearing officer that coverage existed did not constitute substantial credible evidence of actual insurance and in affirming the penalties originally assessed by the UEF.

Total Mechanical Heating & Air Condition, et al. v. ERD/UEF , 2002 MT 55 In a proceeding involving the UEF's assessment of a penalty against an allegedly uninsured employer, the UEF shoulders the burden of proving whether an entity is a statutory "employer" and, if it is, whether the employer is uninsured for workers' compensation coverage. See Auto Parts v. Employement Relations Div., 2001 MT 72, 305 Mont. 40, 23 P.2d 193. In the case of "leased" employees, the definition of "employer" within section 39-71-117, MCA (1993) presumes that client companies are the statutory employers but allows that presumption to be rebutted pursuant to subsections 3(a) and (b) of the statute. To rebut the presumption and find an employee leasing company to be the "employer," there must be a showing that the employee leasing company met certain conditions, one of which is that the leasing company provided workers' compensation coverage to its clients from the inception of its Montana operation. Where the leasing company professes to be the employer, it had the burden to satisfactorily rebut the statutory presumption, which it failed to do where it did not produce credible evidence of workers' compensation insurance. By proving that the National Council of Compensation Insurance (NCII) and State DLI databases did not show insurance for the relevant entities, the UEF, under Auto Parts, supra, met its burden of proving that coverage was not established.

ERD/UEF v. Total Mechanical Heating [6/26/00] 2000 MTWCC 39 DOL Hearing Officer's determination that companies "leasing" employees were insured by putative policies arranged by "lessor" entity reversed where record does not contain substantial evidence of existence of policies nor that lessor retained control over employment as required by section 39-71-117 if "lessee" were to rely on "lessor's" WC policy. WCC Decision affirmed in Total Mechanical Heating & Air Condition, et al. v. ERD/UEF, 2002 MT 55.

Dahl v. UEF, 1999 MT 168. Where section 39-71-401(1), MCA (1993), requires an employer to elect to be bound by the provisions of compensation plan No. 1, 2, or 3, an employer may not rely upon a workers' compensation policy purchased by a company furnishing employees and providing bookkeeping services such as issuing of payroll checks and paying employment taxes. If the workers in question are in fact employees, and not temporary workers substituting for permanent employees on leave or hired to meet an emergency or short term workload (see §39-71-116(29), MCA (1993), then the employer is uninsured under section 39-71-501, MCA (1993) if it does not itself carry workers' compensation insurance.

Dahl v. UEF, 1999 MT 168. Workers used to meet a company's baseline needs and working continuously and consistently for a company are not temporary employees within section 39-71-116(29), MCA (1993). Where section 39-71-401(1), MCA (1993), requires an employer to elect to be bound by the provisions of compensation plan No. 1, 2, or 3, an employer may not rely upon a workers' compensation policy purchased by a company furnishing employees and providing bookkeeping services such as issuing of payroll checks and paying employment taxes if the workers in question are in fact employees and not temporary workers. If a company has employees but does not itself carry workers' compensation insurance, the employer is uninsured under section 39-71-501, MCA (1993) if it does not itself carry workers' compensation insurance.

Dahl, d/b/a Big Sky Concrete v. UEF [5/12/98] 1998 MTWCC 39 Statutory requirements are satisfied where a workers' compensation policy covered the workers, even though the policy was purchased by an employment agency and not the entity for whom the workers were performing work. [Note: WCC reversed on this issue in Dahl v. Uninsured Employers' Fund, 1999 MT 168.]