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Capital Carpet v MESC 17.02

Section 42

EMPLOYEE STATUS, Economic reality test, Carpet cleaners

CITE AS: Capital Carpet v MESC, 143 Mich App 287 (1985).

Appeal pending: No

Claimant: N/A

Employer: Capital Carpet Cleaning and Dye Company, Inc.

Docket No. L80-03459-R01-1683

COURT OF APPEALS HOLDING: Whether a business is an employer of a worker for purposes of the MES Act depends upon the economic reality of their relationship; under the economic reality test, among the factors to be used are (1) control of the worker's duties, (2) the payment of wages, (3) the right to hire and fire and the right to discipline, and (4) the performance of the duties as an integral part of the employer's business towards the accomplishment of a common goal.

FACTS: Carpet cleaners worked under a contractual agreement with Capital Carpet [CC]. They reported to CC every morning and received work assignments for the day. The cleaners used CC's office to make appointments.

The cleaners received a commission which ranged from 50-60%. All income was turned over to CC and the cleaners were given a paycheck. Income and social security taxes were not withheld. The cleaners rented equipment and purchased chemicals from CC. The costs were deducted from their paychecks. They could purchase their own equipment but chemicals had to be purchased from CC.

The cleaners were in control of the jobs themselves, were not supervised by CC and were responsible for hiring and paying their own help. The cleaners were encouraged to wear CC T-shirts. The cleaners represented themselves as associated with CC's business and promoted that business. None of the cleaners cleaned on their own or for any other company.

DECISION: The cleaners were employees for MESA purposes.

RATIONALE: CC controlled the overall direction of the cleaners' employment situation. Moreover, CC paid their wages, and the work done was so integral to CC's business, neither could exist without the other. In light of the principals of the "economic reality" test, it was clear they were employees.


5, 6, d1: N/A

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