Sections 42, 44
EMPLOYEE STATUS, Independent contractor, Psychologists
CITE AS: Psychological Services v MESC, Kent Circuit Court, No. 89-64789-AE, (May 4, 1990).
Appeal pending: No
Employer: Psychological Services
Docket No. L87-07843-RO1-1978
CIRCUIT COURT HOLDING: Where several licensed psychologists paid to use space and clerical services provided by the clinic owner, but conducted separate practices serving clients, they were not employees of the clinic but were independent contractors.
FACTS: Dr. Charles Laufer operates a clinic which provides psychological services. Several individuals who are licensed psychologists see clients at his facility, use the office suite, present their billing information to the office manager employed by Dr. Laufer and pay Dr. Laufer a 40% share of their receivables. Dr. Laufer provides testing supplies and clerical services in addition to office space. These are no written contracts. IRS 1099 forms are issued to the claimants. Dr. Laufer advertises the clinic in the yellow pages under his name. Some of the claimants are not fully licensed (i.e. have limited licenses) and must practice in a fully licensed establishment.
DECISION: Services provided are not in employment and remuneration received was not wages under Section 42 and 44.
RATIONALE: MESC relied on inadequate evidence in reaching its conclusion that services performed by 4 psychologists were in employment. The fact that each contributed 40% of their billings to pay for the overhead does not establish that there was an employer-employee relationship. Reliance on a form filled out only by Dr. Laufer while ignoring his sworn testimony regarding the form was error. Applying the economic reality test yields the conclusion that the psychologists did little more than share expenses at the clinic.
11, 13: N/A