80 Op. Att'y Gen. 154 (1992)

80 Op. Att'y Gen. 154, 164 (1992)
  You also ask whether a qualified employe service company could use the provisions of section 108.065 "to assume sole liability for the State Unemployment for all its employes who have been determined to be its employes under the Federal Unemployment Act?" Based on the above discussion, it is my opinion that an employe service company could qualify as an employer and assume liability for state UC taxes as long as the employe service company is taxed under the federal unemployment tax act on the basis of an individual's employment in connection with the employe service company. See sec. 108.065, Stats.

80 Op. Att'y Gen. 154, 164 (1992)
  In your third fact situation, you ask:

80 Op. Att'y Gen. 154, 164 (1992)
  If the client, the employe, and the company all agree that the company is acting as the employe service company and the company has a binding Federal ruling to that effect, is that enough for the company to meet the definition of an employe service company which will then allow the company to make use of the provisions of [section] 108.065?

80 Op. Att'y Gen. 154, 164 (1992)
  In view of the answers to your previous questions, I conclude that these facts, standing alone, would not qualify a company as an employe service company. As already indicated, a company must, at minimum, satisfy the criteria of section 108.02(12m) with a factual showing. An agreement between the client, the employe and the company that the company is acting as an employe service company and a binding federal ruling to that effect may or may not be relevant to meeting the specific requirements of section 108.02(12m).

80 Op. Att'y Gen. 154, 164 (1992)
  In the fourth fact situation, you ask:

80 Op. Att'y Gen. 154, 164-165 (1992)
  Does the fact that all agencies of both the State and Federal government, other than the Wisconsin Unemployment division, including the Wage and Hour Division and Workers Compensation Division, both operating under the same umbrella of the Department of Industry, Labor, and Human Relations, all recognize the company to be the employer lend any weight to its meeting the definition of an employe service company which will allow the company to make use of the provisions of [section] 108.065?

80 Op. Att'y Gen. 154, 165 (1992)
  Weight, yes; controlling effect, not necessarily. The fact that all agencies of both state and federal government except the Wisconsin unemployment compensation division recognize the company to be the employer, does not relieve the Wisconsin unemployment compensation division from its responsibilities under the statutes to determine employer status as an employe service company. First, notwithstanding the other federal and state agency determinations, the Legislature created specific statutory provisions to define an employe service company and to determine employer status for UC tax purpose. It is presumed that the Legislature was aware of the other agency statutes, such as workers' compensation, when sections 108.02(12m) and 108.065 were adopted in 1987. Kindy v. Hayes, 44 Wis. 2d 301, 314, 171 N.W.2d 324 (1969), citing Town of Madison v. City of Madison, 269 Wis. 609, 614, 70 N.W.2d 249 (1955). Thus, the Legislature clearly intended for a company to comply with the specific statutory mandates in terms of unemployment compensation. Therefore, the other federal and state agency determinations have limited relevance with respect to the Wisconsin unemployment compensation division's application of the statutes to a given set of facts.

80 Op. Att'y Gen. 154, 165-166 (1992)
  Second, the clear language of section 108.02(12m) requires that a factual determination be made that the five conditions are satisfied before the company can be considered an employe service company. Other agency determinations of employer status are not included within the required factual showing of section 108.02(12m).¯12 Thus, I conclude that a showing by the company of other agency determinations which found the company to be an employer is not necessarily sufficient to meet the specific statutory requirements of section 108.02(12m).

80 Op. Att'y Gen. 154, 166 (1992)
  Overall, it is my opinion that the unambiguous statutory language and the legislative history clearly set out the interrelationship between sections 108.02(12m) and 108.065 for unemployment compensation purposes. Section 108.02(12m) states the criteria which must be met in order for a company to be considered an employe service company. Once these requirements are met, a company can invoke section 108.065 which determines whether an employe service company qualifies as an employer for state UC purposes. It is clear that a company must satisfy all of the requirements in sections 108.02(12m) and 108.065 to be considered an employe service company and an employer.

80 Op. Att'y Gen. 154, 166 (1992)
JED:JDN

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-275   1 For the history behind this legislation, see Draft, Employer Status in the Leasing Industry for UC Purposes (hereinafter "Draft"), at 2-4, 6-7, Statute Drafting File to 1987 Act 255, LRB 5433/7, Wisconsin Legislative Reference Bureau, State Capitol, Madison, Wis.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-276   2 The employer-employe relationship has also been addressed by the courts in an analogous situation. The issue of whether an employer-employe relationship exists typically arises in cases involving independent contractors and workers' compensation. In order to determine whether an "employer-employe" relationship exists in the independent contractor situation for the purposes of state workers' compensation, the company and the individual must meet certain statutory qualifications. This has been characterized by reviewing courts as a question of fact. See United Way of Greater Milwaukee v. DILHR, 105 Wis. 2d 447, 453, 313 N.W.2d 858 (Ct. App. 1981).

80 Op. Att'y Gen. 154, 154 (1992) - Footnote
  Similarly, in the unemployment compensation situation, a company or an individual must meet certain statutory qualifications to be considered an employer or an employe. Cf., Keeler v. LIRC, 154 Wis. 2d 626, 453 N.W.2d 902 (Ct. App. 1990); Tri-State Home Improvement v. LIRC, 107 Wis. 2d 748, 322 N.W.2d 700 (Ct. App. 1982), aff'd, 111 Wis. 2d 103, 104-05, 330 N.W.2d 186 (1983); and Princess House, Inc. v. DILHR, 105 Wis. 2d 743, 314 N.W.2d 922 (Ct. App. 1981), aff'd, 111 Wis. 2d 46, 49, 330 N.W.2d 169 (1983).

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-277   3 See Statute Drafting File to 1987 Wisconsin Act 255, LRB 5433/7, Wisconsin Legislative Reference Bureau, State Capitol, Madison, Wis. See also Draft, at 1 and 4.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-278   4 See Draft, at 1.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-279   5 Additionally, the representatives of the leasing industry requested that the law be changed so that the leasing company was considered the employer. See Draft, at 1.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-280   6 See Draft, at 8-10.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-281   7 See Memorandum, Policy Paper on Leasing Firms, at 1-2, Statute Drafting File to 1987 Wisconsin Act 255, LRB 5433/7, Wisconsin Legislative Reference Bureau, State Capitol, Madison, Wisconsin.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-282   8 Id., at 2-3.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-283   9 Section 108.02(12m) created by 1987 Wisconsin Act 255 5. Section 108.065 created by 1987 Wisconsin Act 255 34 and 44.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-284   10 See Statute Drafting File to 1987 Wisconsin Act 255, LRB 5433/7, Analysis by the Legislative Reference Bureau, at 1-2, Wisconsin Legislative Reference Bureau, State Capitol, Madison, Wisconsin. See also Draft, at 6-12.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-285   11 This provision was included to resolve the lack of coordination between the federal and state determinations of employer status with regard to leasing companies. See Draft, at 11.

80 Op. Att'y Gen. 154, 154 (1992) - Footnote

Destination-286   12 Whether administrative res judicata or collateral estoppel can be applied in a particular case is beyond the scope of this opinion.
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