Current through Register Vol. 48, No. 38, September 20, 2024
a) In determining whether services performed
by an individual for an employing unit are employment, as defined by Section
212 of the Unemployment Insurance Act (the Act) [820 ILCS
405/212] , the Agency shall, when applicable to a
particular factual situation:
1) Review
written agreements between the individual and the employing unit;
2) Interview the individual or employing
unit;
3) Obtain statements of other
persons with relevant information;
4) Examine regulatory statutes governing the
organization, trade or business;
5)
Examine the books and records of the employing unit; and
6) Make any other investigation necessary to
make a determination.
b)
The Agency will apply the exceptions specified in the Act to the facts as they
exist, and the designation or description which the parties apply to their
relationship is not controlling.
c)
The mechanics of compensation are not controlling and the fact that an
individual is compensated by commission or any payment other than salary does
not preclude a determination that the individual is in employment under the
Act.
d) The exceptions in Section
212 of the Act are conjunctive, and all three must be proven by the employer to
establish the exemption.
e)
"Engaged in an independently established trade, occupation, or business" within
the meaning of Section 212(C) of the Act means that the individual has a
proprietary interest in the business that he or she can sell, give away or
operate without hinderance from any other party. While no one factor will
determine if an individual is engaged in an independently established trade,
occupation, profession or business as set out in Section 212(C) of the Act, the
business reality or totality of circumstances will determine the presence of
this condition. The following types of factors indicate that the individual is
engaged in an independently established trade, occupation, profession, or
business, as set out in Section 212(C) of the Act:
1) The individual's interest in the business
is not subject to cancellation or destruction upon severance of the
relationship;
2) The individual has
an investment of capital and owns the capital goods of the business
enterprise;
3) The individual gains
the profits and bears the losses of the business enterprise;
4) The individual makes his or her services
available to the general public or the business community on a continuing
basis;
5) The individual includes
the individual's services on a Federal Income Tax Schedule as an independent
business or profession;
6) The
individual performs services for the employing unit under his or her own
business name;
7) The individual
has a shop or office of his or her own;
8) The employing unit does not represent the
individual as an employee of the firm to its customers;
9) The individual hires his or her own
helpers or employees, without the employing unit's approval, pays them without
reimbursement from the employing unit, and reports their income to the Internal
Revenue Service;
10) The individual
has an account number with the Agency and reports the wages of his or her
workers monthly or quarterly, as the case may be, to the Agency;
11) The individual has the right to perform
similar services for others on whatever basis and whenever he or she
chooses;
12) The individual
maintains a business listing in the telephone directory or in appropriate trade
journals;
13) If the services
require a license, the individual has obtained and paid for the license in his
or her own name.
f) The
two factors in Section 212(B) of the Act are in the alternative. Section 212(B)
of the Act is satisfied if the service is either outside the usual course of
business of the employing unit or performed outside of all the places of
business of the employing unit:
1) Services
that merely render the place of business more pleasant or are not necessary to
the employing unit's business are outside the usual course of business.
EXAMPLE: The services of a window washer engaged by an
employing unit whose business is selling woolens are outside the usual course
of the business of the employing unit.
2) Because services are performed outside the
employing unit's premises does not preclude an individual from being found to
be in employment. This decision is based upon the occupation and the factual
context in which the services are performed.
A) EXAMPLE: The homes of typists who are
typing manuscripts for an employing unit are places of business of the
employing unit.
B) EXAMPLE: Any
territory in which a salesman represents his or her employing unit's interests
is the employing unit's place of business.
g) "Direction or control" within the meaning
of Section 212(A) of the Act means that an employing unit has the right to
control and direct the worker, not only as to the work to be done but also as
to how it should be done, whether or not that control is exercised. The
following are illustrative of the types of questions the Department will
examine to determine whether "direction or control" exists. The type of
business subject to review and the relationship being examined will determine
which questions are asked in any given review under this Section. No one
question or answer or combination of questions and answers will determine
whether direction or control exists but rather the business reality or totality
of circumstances will determine if direction or control exists:
1) Does the employing unit issue assignments
or schedule work, set quotas or time requirements;
2) Does the employing unit have the right to
change the methods used by the worker in performing his or her
services;
3) Does the employing
unit require the worker to follow a routine or schedule;
4) Does the employing unit require the worker
to report to a specific location and/or at regular intervals;
5) Does the employing unit require the worker
to furnish a record of his or her time to the firm;
6) Does the employing unit require the worker
to perform services a specific number of hours per day or per week;
7) Does the employing unit engage the worker
on a permanent basis;
8) Does the
employing unit reimburse the worker for expenses incurred;
9) Is the worker eligible for a pension, a
bonus, paid vacation or sick pay;
10) Does the employing unit carry workers'
compensation insurance on the worker;
11) Does the employing unit deduct Social
Security tax from the worker's compensation;
12) Does the employing unit report the
worker's income to the Internal Revenue Service on Form W-2;
13) Does the employing unit bond the
worker;
14) Does the employing unit
furnish the worker with materials and supplies, tools or equipment;
15) Does the employing unit furnish the
worker with transportation, samples, a drawing account, business cards, an
expense account, or order blanks;
16) Does the employing unit allow the worker
to sell noncompetitive lines or engage in other employment;
17) Does the employing unit restrict the
worker in terms and conditions of sale and choice of customers;
18) Does the employing unit assign or limit
the territory in which the individual performs;
19) Does the employing unit set the price and
credit terms for the products or service;
20) Does the employing unit reserve the right
to approve orders or contracts;
21)
Does the employing unit have a right to discharge;
22) Does the employing unit require
attendance at meetings or training courses;
23) Does the employing unit have the right to
appoint the individual's supervisors;
24) Does the employing unit have the right to
set rules and regulations;
25) Does
the employing unit purport to guarantee the product or service
performed;
