NORA H. CORREA, )
vs. ) Case No. 03-4386
Respondent. )
Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, conducted the final hearing in Miami, Florida, on February 11, 2004.
For Respondent: Thomas E. Wright
Assistant General Counsel Department of Management Services 4050 Esplanade Way, Suite 260
The issue is whether, under the Florida Retirement System, Petitioner occupied a regularly established position while
working as a pool respiratory therapy technician at Jackson Memorial Hospital for 12 years.
By letter dated May 23, 2002, Respondent advised Petitioner that she was ineligible to participate in the Florida Retirement System because her position as a "pool" respiratory therapy technician at Jackson Memorial Hospital was a temporary position for retirement purposes. By letter dated April 26, 2003, Petitioner requested a formal hearing concerning her eligibility for benefits under the Florida Retirement System.
At the hearing, Petitioner called two witnesses and offered into evidence four exhibits: Petitioner Exhibits 1-4.
Respondent called one witness and offered into evidence ten exhibits: Respondent Exhibits 1-10.
The parties did not order a transcript. Respondent filed a proposed recommended order on February 23, 2004.
Petitioner is a certified respiratory therapy technician. Her first job as a respiratory therapy technician was at Mercy Hospital in Miami. Later, she worked at Coral Gables Hospital in a similar capacity.
In May or June 1991, Petitioner began working at Jackson Memorial Hospital. She and Jackson Memorial Hospital executed a Respiratory Pool Contract for Therapists and
Technicians. The contract referred to Petitioner as a "per-diem employee." The term of the contract was from May 28, 1991, through October 31, 1991, subject to renewal, but the parties never renewed the contract in writing.
After listing the benefits in the section addressing compensation, the contract provided: "[Jackson Memorial Hospital] participates in the State Retirement System after four months of continuous employment." The reference to the "State Retirement System" is to the Florida Retirement System (FRS), in which Jackson Memorial Hospital participated at all times material to this case.
The contract required Petitioner to work at least two shifts per pay period and to notify her supervisor by the tenth day of the month as to the days and hours that she will be available to work during the following month. The contract stated that either party may cancel a scheduled work shift, but only on at least two hours' notice to the other party. The contract provided that Jackson Memorial Hospital may terminate the contract without case on 14 days' notice.
The contract provided that Jackson Memorial Hospital "shall exercise exclusive control and/or direction over the method and matter by which [Petitioner] performs [her] professional services and functions to the extent permitted by law." The contract subjected Petitioner to the supervision of
her supervisor and required that she conform to all rules and policies of Jackson Memorial Hospital, including its "Standards of Excellence," dress code, and personnel policies. During her employment with Jackson Memorial Hospital, Petitioner has received training, including directions to follow a strict script while interacting with patients in their rooms.
Immediately upon commencing employment with Jackson Memorial Hospital, Petitioner and her supervisor agreed that, unless Petitioner notified her supervisor to the contrary by the tenth of the preceding month, Petitioner would work a specific shift for 40 hours per week from Tuesday through Saturday during each week of the month. This agreement remained in effect until two or three years ago, when Petitioner and her supervisor agreed that Petitioner would work only Sunday and Monday each week, unless Petitioner notified the supervisor to the contrary by the tenth of the preceding month.
From 1991 through the present, Petitioner has suffered no breaks in employment, meaning that she always has worked for at least part of each calendar month. In almost every month, she worked for at least very substantial parts of the month. She reported to work despite the birth of grandchildren and hurricanes. Perhaps four or five times each year, Jackson Memorial Hospital would not have enough work to warrant Petitioner's presence. Routinely, Petitioner's supervisor asked
her to work a double shift because the hospital had too much work relative to available staff. During her 12-year career with Jackson Memorial Hospital, Petitioner has received numerous commendations for outstanding professional performance from her employer.
From 1991 through the present, Petitioner has worked as a respiratory therapy technician only at Jackson Memorial Hospital. During this time, Petitioner has earned about 20 percent more than respiratory therapy technicians who are not in the pool. However, the record provides no basis to infer that this differential reflects the market value of the retirement contributions that the employer is making on behalf of the non- pool employees. These non-pool employees also enjoy other benefits not extended to pool employees, such as health, life, and dental insurance, paid holiday and sick leave, overtime for more than 40 hours' work per week, and flexible benefit plans for medical and dependent child care expenses.
Jackson Memorial Hospital made FRS contributions for Petitioner for January 1992, June and July 1994, June 1995, and September 1995. Jackson Memorial Hospital has deducted Social Security contributions and federal income tax withholding from every paycheck that it has given to Petitioner. Although Petitioner's W-2 forms for 1991-93 were unavailable, her W-2 forms for 1994-96 showed that she participated in a pension
plan. The remaining forms were illegible or showed no pension plan. The only reason that Petitioner could not leave the pool of respiratory therapy technicians, as she requested to do three times, was that she was not certified by the National Board of Respiratory Care.
Respondent has not questioned that Petitioner is an employee, rather than an independent contractor. Jackson Memorial Hospital has treated her as an employee in taking contributions and withholding from Petitioner's paychecks.
Respondent has adopted a rule, set forth in the Conclusions of Law, setting forth the guidelines to determine whether an individual is an employee or independent contractor. Petitioner satisfies each of the 20 tests, indicating that she is an employee, not an independent contractor. Overall, Petitioner is clearly subject to the close control of her employer, which has even scripted her conversations with patients. Among the specific tests, Jackson Memorial Hospital has trained Petitioner and integrated her technical services into the professional services delivered to its patients. Petitioner has delivered her services personally to Jackson Memorial Hospital's patients, has had a continuing relationship with her employer over 12 years, works set hours agreed upon in advance by her employer, works fulltime exclusively for Jackson Memorial Hospital, works on the employer's premises, uses the
tools and material provided by her employer, works for a wage rather than a profit expectancy, does not offer her services to the general public, may quit at anytime, and is subject to firing at anytime.
The real issue in this case goes to the special emphasis that Respondent's rules give to one of the tests of an independent contractor: the continuing relationship. In the language of the rule, which is discussed in the Conclusions of Law, the question is whether Petitioner has been filling a temporary position. The specific rule provision applicable to this case requires a factual determination of whether she occupies an "on call position," which is by definition a temporary position ineligible for FRS coverage because it is not a regularly established position. An "on call position" is a position filled by an employee who is "called to work unexpectedly for brief periods and whose employment ceases when the purpose for being called is satisfied."
Twelve years' experience teaches that Petitioner was not called to work unexpectedly. Early each month, Petitioner and her employer agreed upon her work schedule for the following month. Rarely did her employer cancel a shift of Petitioner. Occasionally, the employer needed Petitioner to remain at work past her scheduled shift. But neither of these situations occurred with such frequency as to undermine the finding that
Jackson Memorial Hospital scheduled Petitioner's work schedule well in advance, and, each month for 12 years, Petitioner performed her job in strict accordance with this schedule.
The two remaining elements of the rule defining "on call positions" also do not apply to this case. Petitioner did not work "brief periods." She has worked day after day, week after week, year after year, for 12 years. The word "brief" does not apply to any aspect of her employment career with Jackson Memorial Hospital. Nor has her employment "cease[d]" at anytime during these 12 years.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter. §§ 120.569 and 120.57(1), Fla. Stat. (2003).
Petitioner is applying for FRS benefits, so she bears the burden of proof. Department of Transportation v. J. W. C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981).
Section 121.051(1)(a), Florida Statutes, provides that the provisions of the Florida Retirement System (FRS) are "compulsory as to all officers and employees . . .." Section 121.021(11), Florida Statutes, defines "officer or employee" as "any person receiving salary payments for work performed in a regularly established position "
Section 112.021(52), Florida Statutes, defines a "regularly established position," for a local agency, as "a regularly established position which will be in existence for a period beyond 6 consecutive months, except as provided by rule." Section 112.021(53), Florida Statutes, defines a "temporary position," for a local agency, as "an employment position which will exist for less than 6 consecutive months, or other employment position as determined by rule of the division, regardless of whether it will exist for 6 consecutive months or longer."
Section 112.051(1)(d)2, Florida Statutes, prohibits participation in the FRS by a person who provides services as "a consultant or an independent contractor, as defined by [Respondent.]" Florida Administrative Code Rule 60S-1.004(3)(g) prohibits FRS participation for "[a]ny person performing services as a consultant or an independent contractor as defined in Rule 60S-6.001, F.A.C."
Florida Administrative Code Rule 60S-6.001(32) defines an "independent contractor" as follows:
an individual who is not subject to the control and direction of the employer for whom work is being performed, with
respect not only to what shall be done but to how it shall be done. If the employer has the right to exert such control, an employee-employer relationship exists and the person is an employee and not an independent contractor. The Division has
adopted the following factors as guidelines to aid in determining whether an individual is an employee or an independent contractor. The weight given each factor is not always the same and varies depending on the particular situation.
INSTRUCTIONS: An employee must comply with instructions from his employer about when, where, and how to work. The instructions may be oral or may be in the form of manuals or written procedures which show how the desired result is to be accomplished. Even if no actual instructions are given, the control factor is present if the employer has the right to give instructions.
TRAINING: An employee is trained to perform services in a particular manner. This is relevant when the skills and experience which would be used as an independent contractor were gained as a result of previous employment. Independent contractors ordinarily use their own methods and receive no training from the purchasers of their services.
INTEGRATION: An employee’s services are integrated into the business operations because the services are critical and essential to the success or continuation of an agency’s progress/operation. This shows that the employee is subject to direction and control.
SERVICES RENDERED PERSONALLY: An employee renders services personally. This shows that the employer is interested in the methods as well as the results. Lack of employer control may be indicated when a person has the right to hire a substitute without the employer’s knowledge or approval.
HIRING ASSISTANTS: An employee works for an employer who hires, supervises, and
pays assistants. An independent contractor hires, supervises, and pays assistants under a contract that requires him or her to provide materials and labor and to be responsible only for the result.
CONTINUING RELATIONSHIP: An employee has a continuing relationship with an employer. A continuing relationship
may exist where work is performed at frequently recurring, although irregular intervals.
SET HOURS OF WORK: An employee usually has set hours of work established by an employer. An independent contractor is the master of his or her own time and works on his own schedule.
FULL-TIME OR PART-TIME WORK: An employee may work either full-time or part- time for an employer. Full-time does not necessarily mean an 8-hour day or a 5 or 6- day week. Its meanings may vary with the intent of the parties, the nature of the occupation and customs in the locality. These conditions should be considered in defining “full-time.” An independent contractor can work when and for whom he or she chooses.
WORK DONE ON PREMISES: An employee works on the premises of an employer, or works on a route or at a location designated by an employer. The performance of work on the employer’s premises is not controlling in itself; however, it does imply
that the employer has control over the employee. Work performed off the employer’s premises does indicate some freedom from control; however, it does not in itself mean the worker is not an employee.
ORDER OR SEQUENCE OF SERVICES: An employee generally performs services in the order or sequence set by an
employer. This shows that the employee is subject to direction and control of the employer.
REPORTS: An employee submits oral or written reports to an employer. This shows that the employee must account to the employer for his or her actions.
PAYMENTS: An employee is usually paid by the hour, week, or month. An independent contractor is paid periodically (usually a percent of the total payment) by the job or on a straight commission.
EXPENSES: An employee’s business and/or travel expenses are paid by an employer. This shows that the employer is in a position to control expenses and therefore the employee is subject to regulations and control.
TOOLS AND MATERIALS: An employee is furnished significant tools, materials, and other equipment by an employer. An independent contractor usually provides his own tools, materials, etc.
INVESTMENT: An employee is usually furnished the necessary facilities. An independent contractor has a significant investment in the facilities he or she uses in performing services for someone else.
PROFIT OR LOSS: An employee performs the services for an agreed upon wage and is not in a position to realize a profit
or suffer a loss as a result of his services. An independent contractor can make a profit or suffer loss. Profit or loss implies the use of capital by the individual in an independent business of his own.
WORKS FOR MORE THAN ONE PERSON OR FIRM: An employee usually works for one organization. However, a person may work for
a number of people or organizations and still be an employee of one or all of them. An independent contractor provides his or her services to two or more unrelated persons or firms at the same time.
OFFERS SERVICES TO GENERAL PUBLIC: An independent contractor makes his or her services available to the general public. This can be done in a number of ways: Having his/her own office and assistants, hanging out a “shingle”, holding
business licenses, having listings in business directories and telephone directories, and advertising in newspapers, trade journals, etc.
RIGHT TO TERMINATE EMPLOYMENT: An employee can be fired by an employer. An independent contractor cannot be fired so long as he or she produces a result that meets the specifications of the contract. An independent contractor can be terminated but usually he will be entitled to damages for expenses incurred, lost profit, etc.
RIGHT TO QUIT: An employee can quit his or her job at any time without incurring liability. An independent contractor usually agrees to complete a specific job and is responsible for its satisfactory completion, or is legally obligated to make good for failure to complete it.
For the reasons set forth in the Findings of Fact, Petitioner clearly is an employee, not an independent contractor. But not all employees occupy FRS-covered positions.
Florida Administrative Code Rule 60S-1.004(5) provides in relevant part:
An employee who is filling a temporary position shall not be eligible for membership in the Florida Retirement System.
Records documenting the intended length of a temporary position and the dates of employment of an employee in such position must be maintained by the agency. An employer employing a person in a temporary position shall advise the employee at the time of his employment that he is filling a temporary position and cannot participate in the Florida Retirement System or claim this temporary employment later for retirement purposes. A position shall not be considered temporary due to the uncertainty of the employee’s intention to continue employment. A position meeting the definition below shall be a temporary position.
A temporary position in a state agency is an employment position which is compensated from an other personal services (OPS) account as provided for in Section 216.011(1)(x), F.S.
A temporary position in a local agency is:
An employment position which will not exist beyond 6 consecutive calendar months; or
An employment position which is listed below in (d) regardless of whether it will exist beyond 6 consecutive months.
When an employment position in a local agency is extended beyond 6 consecutive calendar months, with the exception of those listed in (d) below, it shall become a regularly established position for retirement purposes and the employer shall enroll the current employee and all subsequent employees filling the position into the retirement system and shall begin to make the necessary contributions on the first day of the seventh calendar month, or on the first day of the month following the month in which the decision is made to extend the position beyond 6 months, if earlier. When a temporary position extends
beyond 6 months and there is no documentation substantiating that the position was originally established as a temporary position to last for 6 months or less, the employee filling such position will be enrolled from the initial date of employment and retirement contributions shall be due retroactively to that date.
The following types of positions in a local agency are considered temporary positions for retirement purposes. Documents to support such temporary positions listed below must be maintained in the agency’s records (see subsection
60S-5.007(2), F.A.C.).
Student Positions (positions filled by persons who are bona fide students in an accredited educational or vocational program who perform services for a public employer in a temporary position set aside strictly for students).
Work-Study Positions (positions filled by students participating in the Federal work-study program).
Temporary Instructional Positions (positions which are established with no expectation of continuation beyond one semester or one trimester at a time, to teach in a community college, public school, or vocational institution; effective July 1, 1991, such positions may include paper graders, tutors, notetakers, and lab tutors at community colleges).
Substitute Teacher Positions (positions filled by persons not on contract called to work intermittently to substitute).
On Call Positions (positions filled by employees who are called to work unexpectedly for brief periods and whose employment ceases when the purpose for being called is satisfied).
CETA and JTPA Positions, and “enrollees” in Senior Community Service Employment Program of the USDA as provided
in sub-subparagraphs 60S-1.004(4)(c)7.a. and 8.a, F.A.C.
Non-salaried Elective Positions (positions in which the elected officials receive no compensation, but receive expenses, e.g., per diem, stipend, or an honorarium).
Temporary Non-instructional Community College Positions (effective July 1, 1991, non-instructional positions filled by employees paid from an other-personal- services budget for not more than 2080 hours of total service within a single community college. Such person who is employed beyond 2080 total aggregate hours within a community college shall thereafter be an employee filling a regularly established position and a compulsory member of the Florida Retirement System regardless of the budget from which he is paid.)
Positions established on a temporary basis as a result of a state of emergency as declared by the Governor because of a disaster caused by destructive storms, winds, floods, fires, earthquakes, freezes, and other similar emergencies.
In contending that Petitioner occupies a temporary position, rather than a regularly established position eligible for FRS coverage, Respondent relies on the definition of "on call positions" in Florida Administrative Code Rule
60S-1.004(5)(d)5, cited above, and two court cases.
Under the rule, Petitioner's position does not meet the definition of an "on call position." For 12 years, she has worked a regular schedule and rarely been called to work unexpectedly for brief periods. For 12 years, her employment has continued, rather than ceased when the purpose for being
call was satisfied. Not falling within the exception of Florida Administrative Code Rule 60S-1.004(5)(d)5, Petitioner's position became regularly scheduled, under Florida Administrative Code Rule 60S-1.004(5)(c) when Jackson Memorial Hospital extended it beyond six consecutive calendar months in 1991.
The two cases do not support a contrary result. In Hillsborough County Hospital Authority v. Department of Administration, Division of Retirement, 495 So. 2d 249 (Fla. 2d DCA 1986), a hospital petitioned Respondent for a declaratory statement whether 229 nurses in the nursing pool occupied regularly established positions. In its statement, Respondent stated: "When a particular employee works in the Hospital beyond four months on a recurring basis, a transition has occurred from 'on call' status to employment in a part time regularly established position." 495 So. 2d at 251. Warning that its opinion necessarily addressed a general statement and not the specific circumstances of a specific employee, the court reversed the declaratory statement to the extent that it held that, in every case of employment extending even one day past four months' duration (under current law, six months), the previously temporary position becomes a regularly established position.
The Hillsborough County Hospital Authority court noted that the hospital needed the ability "periodically to call in
additional nurses with specific skills. The nursing pool provides the needed flexibility. The pool nurses possess the indicia of independent contractors." 495 So. 2d at 253. (The court relied on independent-contractor criteria from a case dealing with unemployment compensation, suggesting that the Hillsborough County Hospital Authority decision may have predated the rule, cited above, defining independent contractors for the purpose of determining eligibility for FRS coverage.) The court found that the pool nurses were independent contractors because they had no guarantee of work and had no obligation to appear, if called; they could and did work for other hospitals; they were paid more than other employees, but received no fringe benefits; and their group turned over constantly, as they were part of an ever-changing pool of employees.
In Rayborn v. Department of Management Services, Division of Retirement, 803 So. 2d 747 (Fla. 3d DCA 2002) (per curiam), Jackson Memorial Hospital had employed a registered nurse in a regularly established position from 1988 through 1991. After a three-year break in service, the nurse was reemployed by Jackson Memorial Hospital, but in a "temporary relief/pool nurse." Jackson Memorial Hospital erroneously reported his job as a regularly established position for two
years, but corrected the error. Seeking FRS benefits, the employee requested an administrative hearing.
In affirming the final order denying the employee FRS benefits, the Rayborn court found that the employee, as a pool nurse, had received substantially higher wages and more flexible working schedules than did "full-time nurses," but did not receive the same benefits. The court cited Hillsborough County Hospital Authority, discussed above, for the "holding that pool nurses who occupied temporary positions were not members of the [FRS]." 803 So. 2d at 748. The court also dismissed an estoppel argument made by the employee.
The holding of Hillsborough County Hospital Authority is that Respondent may not treat all pool nurses as occupying regularly established positions merely because they have been employed in the same job for six months and one day. This holding has no bearing on the present case. Employment in a local agency, such as Jackson Memorial Hospital, beyond six consecutive months is a necessary condition for FRS coverage, under Florida Administrative Code Rule 60S-1.004(5)(c), but not a sufficient condition, as held in Respondent's declaratory statement that the court invalidated. As the rules make clear, if the employee occupies an "on call position," she is not filling a regularly established position, even after the expiration of six consecutive calendar months.
Hillsborough County Hospital Authority was decided on the basis that the pool nurses were independent contractors, not employees. As noted above, independent contractors are not entitled to FRS coverage. However, under the present rule, Florida Administrative Code Rule 60S-6.001(32), the question in this case is not close: Petitioner is an employee, not an independent contractor.
Even the reasoning of Hillsborough County Hospital Authority does not apply to this case. Petitioner has worked a regular schedule for 12 years and dutifully reported to work as scheduled. She did not work for other hospitals, and she did not have any breaks in service while working for Jackson Memorial Hospital.
The only part of the reasoning in Hillsborough County
Hospital Authority, as well as Rayborn, applicable to this case is that Petitioner received 20 percent higher pay than her nonpool counterparts.
The present record also establishes that, unlike Petitioner, her nonpool counterparts received employer-paid health, life, and dental insurance, employer-paid leave, and, of course, employer-paid FRS contributions. Perhaps the records in the two appellate decisions were sufficiently detailed to support the inferences that the differentials in pay in those cases compensated the pool employees for the absence of
employer-paid FRS contributions. The present record is more modest and does not support such an inference.
But even if the present record revealed that Jackson Memorial Hospital paid Petitioner "her" FRS contribution, the question would remain whether she occupied a regularly established position. Differentials in pay do not defeat the law that FRS coverage is compulsory for employees who occupy regularly established positions, nor do differentials in pay factor into the rules adopted by Respondent to determine which pool positions are temporary and which are regularly established. If parties could structure employment contracts so that, such as by differentials in pay, certain employees occupying regularly established positions could escape FRS coverage, they would effectively be replacing the FRS defined benefit plan, for those employees, with individually administered private savings plans (presumably not tax- advantaged). Such a process could jeopardize the integrity of the defined benefit plan for other members.
Thus, regardless of any differential in pay, the pool employee is occupying a regularly established position if she is not an independent contractor (Rule 60S-1.004(3)(g)) and if her employer extends her position beyond six consecutive calendar months (Rule 60S-1.004(5)(c)), unless her employment is characterized by the following two facts: 1) she is called to
work unexpectedly for brief periods and 2) her employment ceases when the purpose for being called is satisfied (Rule
60S-1.004(5)(d)5.)
Petitioner has proved that she is not an independent contractor, Jackson Memorial Hospital has extended her position beyond six consecutive calendar months, she is not called to work unexpectedly for brief periods, and her employment does not cease when the purpose for being called is satisfied.
RECOMMENDED that the Division of Retirement enter a final order determining that, following the sixth consecutive calendar month after the commencement of employment at Jackson Memorial Hospital in 1991, Petitioner has been employed in a regularly established position under the Florida Retirement System.
DONE AND ENTERED this 24th day of February, 2004, in Tallahassee, Leon County, Florida.
ROBERT E. MEALE
Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 2004.
Department of Management Services Cedars Executive Center, Building C 2639 North Monroe Street Tallahassee, Florida 32399-1560
Qualified Representative c/o Nora H. Correa
Thomas E. Wright Assistant General Counsel
15 days from the date of this recommended order. Any exceptions to this recommended order must be filed with the agency that will issue the final order in this case.
