The provisions dealing with covered employment were previously located in Article 95A, Sections 20(m) and 20(g) of the
Annotated Code of Maryland. After the law was revised in 1991, these provisions were recodified as Sections 8-101(j) and
8-210 of the Labor and Employment Article of the Annotated Code.
Section 8-101(j) states that covered employment means work that an individual performs for an employing unit that is
the basis for benefits. Section 8-201 states that employment is covered employment if it is performed for wages or under
a contract of hire. The contract can be written, oral, express or implied.
Earnings used to become monetarily eligible under Section 8-910, and earnings used to serve penalties under Sections
8-1001, 8-1002, 8-1002.1, and 8-1005 must be earnings in "covered employment."
Services performed are presumed to be employment under Section 8-201 regardless of whether or not there is a common
law relationship of master and servant between the employer and employee unless it is shown by the employer that a person
rendering services comes within all three of the enumerated exceptions in Section 8-205. The employer has the burden of
proof. Warren v. Board of Appeals, 226 Md. 1, 172 A.2d 124 (1961). See also, COMAR 09.32.01.18.
The statute does not limit the right of an employer to contract with an employee. However, the statute does authorize
those who are charged with its enforcement to look through the "tag" placed on the employment relationship and determine,
as a matter of fact, whether the relationship, regardless of what it may be called, comes within the purview of the
statute. Warren v. Board of Appeals, supra.
Section 8-205 deals with independent contractors. It states that work performed under any contract of hire is not
covered employment if: (1) the individual who performs the work is free from control and direction over its performance
both in fact and under the contract; (2) the individual customarily is engaged in an independent business or occupation
of the same nature as that involved in the work; and (3) the work is: (i) outside of the usual course of business of the person for whom the work is performed; or (ii) performed outside of any place of business of the person for whom the work is performed. The employer has the burden of proving that the claimant has met all three of these requirements. If the employer fails to meet its burden, the claimant will not be considered to be an independent contractor and will be found to have worked in covered employment.
Sections 8-206 through 8-222 contain a series of specific statutory exemptions from covered employment.
Section 8-208 states that employment is not covered employment if it is performed for a church or for an organization
that is "operated primarily for religious purposes." Also, employment is not covered employment if performed by a duly
ordained minister or a member of a religious order in the exercise of his or her religious duties.
In determining whether church-affiliated schools are "operated primarily for religious purposes," consideration should
be given to the relationship between affiliation with the church and institutional autonomy, including composition of
the governing board, degree of supervision by the church, and sources of financial support. Consideration should also be
given to the extent of religious indoctrination, including stated purpose, extent of encouragement of spiritual
development, composition of the student body, extent of religious exercises, extent of prayer in the classroom, extent
of religion or theology classes, degree of intellectual freedom in nontheology classes, composition of the faculty and
the degree of academic freedom. Employment Security Administration v. Baltimore Lutheran High School Association,
Inc., et al., 291 Md. 750, 436 A.2d 481, 487 (1981). See also, COMAR 09.32.01.19.
The Supreme Court has ruled that schools having no legal identity separate from a church are exempt from unemployment
insurance taxation. St. Martin Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 101
S.Ct. 2142 (1981). Therefore, day and Sunday schools and parochial schools, none of which were separately
incorporated, were entitled to have their school employees exempted from taxes imposed by the Federal Unemployment Tax
Act and by the complimentary Maryland Unemployment Insurance Law since they were without a legal identity separate from
their church or synagogue. Employment Security Administration v. Baltimore Lutheran High School Association, Inc., et
The different treatment afforded those schools which are an integral part of a church and those schools which are
separately incorporated has a sufficient rational basis and does not violate the
principle of equal protection of the laws. Baltimore Lutheran High School
Association, Inc. v. Employment Security Administration, 302 Md. 649, 490 A.2d 701 (1985).
Covered Employment - Section 8-101(j), 8-201 et seq.
|I. In General
A. Scope of Section 8-201
The fact that a claimant's earnings are not in covered employment as
defined in Section 8-201 does not exempt those earnings from being
reported and deducted from a claimant's weekly benefit amount.
Vincent v. GEICO, 1072-BH-81.
B. Relation to Section 8-803
Where a claimant's services are found to be noncovered employment under
Section 8-201, the earnings the claimant received for those services
cannot be considered in determining her monetary eligibility for
benefits under Section 8-803. Leftwich, 140-BH-83.
|II. Independent Contractor
A. In General
As a result of an award of workers' compensation benefits, the insurance
carrier was required to pay for 24-hour nursing care for an injured
person. The insurance company agreed to send its checks directly to the
nurses, as the family of the injured person could not afford to pay the
nurses first and await reimbursement. The insurance company did not hire
or supervise the nurses, did not negotiate their salaries with them, and
had no authority to fire them. There was no contract of hire between the
nurses and the insurance company within the meaning of Section 8-201. Pennsylvania
Manufacturers' Association Insurance Company, 3-EA-86.
Where the claimant provided housekeeping
services for third parties (elderly county residents), and reimbursement
was provided by the employer, the claimant was performing services for
the employer under Section 8-201. This case was distinguished from the
Pennsylvania Manufacturers' Association Insurance Company case, supra,
because the employer was actually a party to the contract, the employer
actually recruited the claimant and had the authority to terminate the
contract and because the work done by the claimant was work in which the
employer itself was also engaged. Harrison v. Washington County
Department of Social Services, 966-BH-86.
The employer's purpose was to supply
complete medical support services, as well as a facility, to practicing
physicians and psychologists. The employer employed 24 individuals to do
this. The employer provided such services as billing patients,
collection of fees, notification to third party insurance carriers,
receptionist services and maintenance services. The physicians and
psychologist who conducted their practices at the employer's facility
had no active participation in the day to day business operation of the
staff of employees at the building. For the services the employer
provided, the employer deducted 35 percent of the gross amount of fees
which were collected on behalf of the physicians and psychologist. At
the end of the month, the employer issued a check to each individual
physician or psychologist which represented 65 percent of the fees
collected by the employer. Some physicians maintained other offices in
which to conduct their practices, while others did not. The physicians
and psychologist were not employees because they met all of the
requirements of Section 8-205. They were free from control over the
performance of their services, their service was separate and distinct
from the service provided by the employer and they were customarily
engaged in an independently established trade, occupation, profession or
business of the same nature as the service in question. Perry Hall
Medical Administrative Services, 11-EA-91.
The employer operated a cemetery,
mausoleum and pet cemetery. The employer had several individuals
performing sales work for his business. These individuals would seek
customers to purchase cemetery lots, cremation urns, etc. The sales
agents signed a noncompetition agreement with the employer which limited
their outside sales work during and after their term of employment. This
agreement constituted an element of control within the meaning of
Section 8-205(1) and the sales agents, therefore, did not meet the
requirements for being an independent contractor under this section. The
sales contractor, who recruited, trained and sometimes directly
compensated the sales agents was also not an independent contractor
because he failed to meet the requirement of Section 8-205(3) that his
work be outside the usual course of business or performed outside of any
place of business of the employer. Ten percent of the sales contractor's
sales took place directly on the employer's premises. Also, his contract
called for the use of the employer's office. Springhill Memory
The employer was a corporation that
produced commercial advertising films. The employer contracted with
predominantly union workers, but occasionally used nonunion workers. For
union workers, the employer was required to pay an individualized wage
minimum per day and a $43.00 payment per individual, per day to the
union's pension and welfare fund. The employer exercised more than
minimal control over all of the workers in question. The services
performed were performed at studios and locations leased by the
employer. Since the employer's business was to produce commercial films,
the studios and locations where the films were shot were the places of
business of the employer. None of the workers met all three requirements
of Section 8-205; therefore their employment was covered
employment. Trahan Films, Inc., 32-EA-92.
The employer printed newspapers. This
employer contracted with individuals to deliver its products (i.e.,
newspapers). The Board applied the "three-prong test" and
found that newspaper carriers, writers and salespersons were independent
contractors within the meaning of Section 8-205. A detailed analysis is
presented therein. Although upheld on appeal, the Board decision as to
the newspaper writers was vacated by stipulation of parties. Herald
Mail Co., 2990-BH-97.
The employer operated two daily and
afternoon newspapers in Frederick County. Three categories of workers -
carriers, writers and sales persons were held to be independent
contractors under" Section 8-205(2). The Board considered the ten
criteria set forth in COMAR .09.02.01.18b(3)(C). The Board was upheld by
the Circuit Court for Frederick County in 1998. Great Southern
Printing Company, 899-BH-97.
It is the employers' burden to show
that factual circumstances meet the three pronged test established in
Section 8-205. The employer is in the business of catering or preparing
food. It can arrange other services such as waiters and waitresses for
the various events of its clients. Clients of the employer determine
such things as manner of dress, hours and other requirements of the
performance of work of said waiters and waitresses. "Waiters and
waitresses are independent contractors and not employees of the
Appellant, a catering service". Susan Gage, 740-BR-97.
B. Element: Freedom from Control and
The employer was a private duty nursing agency and a fee charging
employment agency. The employer's clients were private citizens who had
need of nursing services. The employer referred different types of
nursing personnel to various clients. One type of nursing personnel
referred to clients was certified nursing assistants (CNAs). The
employer retained significant control over the work performance of the
CNAs. The CNAs signed a contract. The CNAs did not have to accept an
assignment, but once an assignment was accepted, the employer dictated
the hours and the rates charged. The employer billed clients and paid
the CNAs 80 percent of the billing fee regardless of whether the client
paid the fee. The CNAs had to notify the employer if they were ill. The
CNAs were not allowed to solicit work from clients and had to keep a
written record of all client services rendered. The employer evaluated
the CNAs and required them to allow the employer to purchase
professional liability insurance at the CNAs' expense. The CNAs
performed services in covered employment. The employer retained
significant control over the CNAs and the CNAs were not engaged in an
independently established trade, occupation, profession or business. Nurses
Unlimited, Inc., 37-EA-89.
Where outside travel agents use a travel
service solely for the purchase of airline tickets (at a price) for
their customers and the travel service has no control over the agents'
performance of services for their clients, the first criterion is met
under Section 8-205(1).Rinis Travel Service, Inc., 3-EA-84.
In this case, "sales
representatives" were held to be independent contractors within the
meaning of Section 8-205. It is concluded that the sales representatives
were free from the control and direction of the employer. They were also
free to sell products and services for a competing company. America's
Energy Savers Home Improvement, Inc., 3579-BH-96.
The Court of Appeals in DLLR v. Fox,
346 Md. 484, 697 A2d. 478 (1997) (PDF document, 94KB, download
Adobe Acrobat for free) affirmed the Board's decision that Fox,
a sole proprietor who trades as "Dental Placements,"
(furnishing temporary help to dentists' offices, primarily hygienists
and dental assistants) was "not a mere referral or brokering
service which matches the needs for staffing of dentists' offices with
the availability of independent contractors." The Court concluded
that the temporary workers were covered employees subject to the
employer's direction and control. Nancy S. Fox, t/a Dental Placements,
Employer Acct. No. 0028135386.
contractor" case involved an employer that provided home health
care aides to clients at an hourly fee. The employer maintained a list
of approximately 99 "aides". The employer provided
"clients" with whom an aide would be placed. The Board applied
Section 8-205 and concluded that the "aides" were engaged in
"covered employment" mainly because of the control exerted by
the employer over the aides. The Board cited prior cases, Pharmakinetics,
156-EA-94, Herald Mail Co., 2990-BH-97, Fox, 346 Md. 484 697 A2d.
478 (1997), and Personal Care, 21-BH-99.
The employer performed
bio-pharmaceutical services, including clinical evaluations and
analytical chemistry services with respect to prescription and
non-prescription drugs or products for the pharmaceutical industry. The
employer used "volunteers" who were paid. In determining that
the "volunteers" were "independent contractors", the
board applied the three pronged test of (1) whether the individual
performing work was free from control and direction over its
performance, (2) whether individuals were customarily engaged in an
independent occupation of the same nature, and (3) whether the work is
performed outside the usual course of business of the employer. Pharmakinetics
C. Element: Outside Usual Course or
Places of Business
The claimant was a dentist who worked in the office of another dentist.
The claimant worked more or less at his own pace and hours, but the
employer required that the claimant's hours be mutually agreed to by
both parties. All the services were performed in the employer's office
using the employer's equipment, supplies and support staff. The claimant
had no office of his own. All of the patients he treated were patients
who called the employer's office for services. The employer took great
pains to state that the claimant was an independent contractor. There is
a strong presumption under the unemployment law that services performed
are employment unless certain stringent tests are met. Warren v. Board
of Appeals, 226 Md. 1, 172 A.2d 124 (1961). Section 8-201 makes it clear
that the Board is not bound by the labels placed on the relationships by
the parties. Section 8-205 provides a three-part test to determine
whether an individual is an independent contractor. Unless all three
factors are present, the only conclusion the Board can draw is that the
relationship between the parties is employment. In this case, the
requirement that the service is outside of the usual course of business
of the person for whom the service is performed has not been met. All
services performed were that of a dentist which is exactly the
employer's business and all services were performed in the employer's
office. The claimant's employment was covered employment. Levine v.
Harvey Levy, D.M.D., 498-BR-88.
Delivery drivers were engaged in covered
employment and not independent contractors. The Board differentiates
between "delivery drivers" and "messenger services"
as set forth in Section 8-206(d) of the law. As to the independent
contractor issue the Board concluded that the work described in the
cases were neither "outside of the usual course of business",
nor was it "performed outside of any place of business." Brenco,
2089-BH-99, CWS, 2088-BH-99, P.G. Deliveries, 2039-BH-99, Landshark,
D. Element: Customarily Engaged in
Independently Established Trade, Occupation or Profession
Where outside travel agents are customarily engaged in an independently
established occupation as travel agents, free from the control of the
travel service, the test under Section 8-205(2) is met. Rinis Travel
Service, Inc., 3-EA-84.
The employer operated a collection
service. The employer hired individuals to market its services. These
individuals were not free from control over at least a portion of their
performance. Each had been subject to one day of training, each had been
provided names and addresses of prospective clients, and the employer
set the minimum price at which their product could be sold. Also, each
individual was subject to a noncompetition clause which extended for a
six-month period from the date of termination. The employer was unable
to substantiate that any of these individuals were customarily engaged
in an independently established trade, occupation, profession or
business of the same nature as that involved in the service in question.
Since none of these individuals met the requirements for being an
independent contractor under Section 8-205, their earnings were in
covered employment. Modern Systems International, 44-EA-91.
E. Volunteer Test Subjects
The employer performed evaluations of prescription and nonprescription
drugs for the pharmaceutical industry. The evaluations provided data
that the pharmaceutical companies needed in order to obtain government
approval to market new products. The employer used volunteer test
subjects to test certain drugs. The volunteers selected the study in
which they would participate. The volunteers then signed a consent form
and received a dose of the drug. Other than providing blood and urine
samples, the volunteers were not required to perform any work.
Volunteers were always free to leave any time and were paid for the
portion of the test they completed. The employer paid the volunteers a
fee based upon the level of risk of the study and the time required to
eliminate the drug from the volunteer's biological system. Many
volunteers were involved in multiple studies with the employer and other
drug companies. The volunteers were independent contractors since they
met all three requirements of Section 8-205. Pharmakinetics
Laboratories, 156-EA-94. See also, Maryland Code, Labor and
Employment Article, Section 8-222, effective October 1, 1995.
F. Cab Drivers
Where a self-employed cab driver is not performing services in covered
employment pursuant to Section 8-206(d), his earnings as a cab driver
cannot be included in his quarterly wages for determination of his
weekly benefit amount. However, this section does not provide for a
total disqualification of benefits and therefore other earnings from
covered employment could be used. Pearson v. Arrow Cab Company,
G. Agricultural Employment
"Agricultural work" as defined in Section 8-207 was considered
by the Board in Caroline Smith. In this case, the claimant was employed
as a sales clerk selling horticultural products for Friedler's
Greenhouse. Generally, agricultural work is not covered employment
unless the work is performed for a person who pays cash wages at least
$20,000.00 during a calendar quarter or preceding year to individuals
who perform agricultural work; or for a person who employs at least ten
individuals in agricultural work for a part of a day in each of 20
consecutive or non-consecutive weeks during the current or preceding
calendar year, regardless of whether the individuals are employed at the
same moment. Caroline Smith, 508-DR-94.
|III. Student or Intern Status
A. In General
The claimant was employed as a research assistant for the University of
Maryland. He was separated from employment due to lack of work. During
the time he was employed, he was not a student at the University of
Maryland. Section 8-220(b) provides that service performed in the
employment of a school, college or university will not be covered
employment if that service is performed by a student who is enrolled and
regularly attending classes at that school, college or university. This
section of the law does not disqualify the claimant from receiving
benefits because he was not a student at the University of Maryland
during the time that he worked as a research assistant. Harvey v.
University of Maryland, 684-BH-88.
The Board concluded that a "postdoctoral fellow" was not a student but an employee within
the scope of Section 8-220(c)(2). In this case, the claimant was neither
"enrolled nor regularly attending classes" nor was he enrolled
for credit. The claimant performed services for the employer for which
he was paid through a grant. Francis P. Saitta v. Johns Hopkins
B. Work-Study Program
Where the claimant was employed by a work-study program under which the
money for her earnings was provided by a federal grant to her employer,
the claimant was not providing services in covered employment within the
meaning of Section 8-221. Glascoe v. Regional Planning Council, 10-BH-82.
Where a claimant began working part-time
under a vocational work-study program, and later ceased his studies and
became a full-time employee, the claimant's full-time services were in
covered employment within the meaning of Section 8-220(c). The claimant
received no school credit for the full-time employment, and his work was
not part of his educational courses. Alexander v. Elderburg Arc
Welding Company, 714-BR-82.
|IV. Commission Sales
Where the claimant received a car allowance of $15.00 per week, and did not
have to account to the employer for this allowance, the allowance
removed the services from the exemption of Section 8-209(a), and the
claimant's services were in covered employment for the period in which
he received the allowance. Schmidt v. Monumental Life Insurance Company, 16-BH-83.
|V. Family Relationship
Section 8-215 states that employment is not covered if performed for a child or
spouse or for a parent, by a child under the age of 21 years. Although
the employer's son was under the age of 21 at the time the services at
issue were performed, he performed the services for the corporation
which his father owned, and not for his father personally. Therefore,
this exemption is not applicable and his employment was covered
employment. Trahan Films, Inc., 32-EA-92.
|VI. Policy Making Positions
Section 8-212(c)(2) exempts from the definition of covered employment, service
performed in a position that, under the laws of the state, is designated
a major nontenured policy making or advisory position. Therefore, the
chief of the Montgomery County Police Department was not performing
services in covered employment, where he was in charge of a large police
department and his duties necessarily involved advice and formulation of
policy on a grand scale. DiGrazia, 1194-BH-80.
The services of a chief of police of a
very small police department (five people total) in a small town are in
covered employment and not exempt under Section 8-212(c)(2), where the
police commission actually set policy and the chief was primarily
involved in the day-to-day duties of a police officer. The claimant's
position was not a "major nontenured advisory or policy making
position" within the meaning of the law. Hodgins v. Mayor and Commissioners of Delmar, 356-BH-84.
|VII. Employees of Private Church-Related Schools
A. Schools Which Are Not Separately Incorporated
Where a Catholic private school is not separately incorporated, the only
question is whether or not the employees of the school are employees of
a "church" within the meaning of 26 U.S.C., Section
3309(b)(1)(A). La Reine High School, 6-EA-83.
The employer, the Fawn Grove Christian Academy, was created in 1984 by the church board of the Fawn Grove
Church of the Nazarene. The academy was not separately incorporated.
Lacking separate incorporation, the academy did not have a legal
identity separate from the church. The academy was part of the church.
The Supreme Court has ruled that schools having no legal identity
separate from a church are exempt from unemployment taxation. St. Martin
Evangelical Lutheran Church v. South Dakota, 451 U.S. 772, 101
S.Ct. 2142 (1981). The claimant, therefore, performed services for this school
which were not covered employment under Section 8-208(b). The claimant's
earnings cannot be used to make a monetary determination within the
meaning of Sections 8-201 et seq. and 8-803. Russo v. Fawn Grove
Christian Academy, 898-BR-91.
B. Schools Which Are Separately Incorporated
A corporation establishing a school is clearly not a church, even though
the directors of the corporation are from a particular religious order. Penley
v. Mt. St. Joseph's High School, 899-BH-83.
In its remand to the Board, the Court of
Appeals stated that Catholic private schools which are separately
incorporated must show that they satisfy both requirements of 26 U.S.C.,
Section 3309(b)(1)(B). Employment Security Administration v.
Baltimore Lutheran High School Association, Inc., et al., 291 Md.
750, 436 A.2d 481 (1981). In order to meet the requirements of this
section, the school must show that it is: (1) an organization operated
primarily for religious purposes, and (2) that it is operated,
supervised, controlled or principally supported by a church or
convention or association of churches. Baltimore Lutheran High School,
C. Operation by "Church"
The Supreme Court has held that the word "church" means
"the congregation or the hierarchy itself, that is, the church
authorities who conduct the business of hiring, discharging, and
directing the church employees." St. Martin Evangelical Lutheran
Church v. South Dakota, 451 U.S. 772, 101
S.Ct. 2142 (1981). Under this
definition, an order of Catholic nuns is a "church." The order
is a highly organized body of individuals whose entire lives are
dedicated to religious purposes with additional "missions" of
teaching and nursing. The order has its own hierarchy but considers
itself part of the Roman Catholic Church. Therefore, where a private
Catholic school is owned and operated by the order of nuns and is not
separately incorporated, its employees' earnings are exempt from
unemployment insurance taxation. Since the school is owned and operated
by a church, it is not necessary to determine whether the school is
operated "primarily for religious purposes." In determining
whether or not an organization of individuals is a church for the
purpose of determining exemption from an unemployment insurance law, a
liberal interpretation should be given to the word "church" in
order to prevent possible discrimination among religions based upon the
organizational structure of different religions. La Reine High School, 6-EA-83.
Where the board of directors of a Lutheran high school is controlled by delegates of an association of
churches, the school clearly meets the requirement of 26 U.S.C., Section
3309(b)(1)(B) that it be "operated, supervised, controlled or
principally supported by a church or convention or association of
churches." Each Lutheran congregation sends four delegates to the
association of Lutheran Churches, and the board of directors is chosen
directly from that association. Baltimore Lutheran High School, 5-EA-83.
D. Operation "Primarily for Religious Purposes"
Considering the following factors, the Board ruled that the Georgetown
Preparatory School, although operated, supervised, controlled and
principally supported by a church, was not operated "primarily for religious purposes:"
(1) The primary purpose of Georgetown was to run a school and impart a
secondary education recognized by the state of Maryland and prestigious
secular colleges and universities;
(2) Almost all graduates attended secular colleges;
(3) Formal religious classes constituted a small part of the curriculum (approximately 1/8);
(4) Neither students nor teachers must be Catholic;
(5) Aside from formal religion courses, the moral conduct required of
both teachers and students was no different from the conduct required of
teachers and students at any other school;
(6) Seven-eighths of the teachers' time was spent teaching nonreligious
(secular) subjects designed to prepare students for admission to
prestigious secular colleges and universities;
(7) The religious atmosphere did not so permeate the life of the
institution as to make the entire school primarily religious. The
primary purpose of teaching a nonreligious subject was not religious,
even though it may be taught by a religious person, in the presence of
religious symbols and/or after a short religious prayer; and
(8) There was substantial evidence of nonreligious and time-consuming
services performed for the school by persons who were not members of a
religious order were covered employment under Section 8-208(b) and 26
U.S.C., Section 3309(b)(1)(B). Georgetown Preparatory School, 10-EA-82.
Considering the following factors, the Board ruled that Yeshiva High School was operated "primarily for
(1) The amount of each student's day that was taken up with religious
courses (one-half day) in addition to the required attendance at daily
services and the abundance of after-school and weekend religious
(2) The separation of sexes according to religious dogma and strict
dress requirements (which included for boys the wearing of religious
garments for all classes);
(3) The religious composition of the student body (100% Jewish);
(4) The high percentage of students who attended religious institutions
of higher learning after graduation;
(5) The school's stated purpose and bylaws which contained an exception
for religion under the nondiscrimination requirement in the admissions section;
(6) The fact that the school also operated as an orthodox synagogue; and
(7) That the principal of the school, who oversaw the entire school,
including the secular studies department, must be a rabbi.
of these factors, but especially the dominance of religious studies in
the curriculum, set this case apart. Therefore, any employee's services
performed for this employer were not covered employment within the
meaning of Section 8-208(b). Feldman v. Yeshiva High School of
Greater Washington, Inc., 878-BR-84.
E. Services of Members of a Religious Order
Section 8-208(c) provides that "employment" does not include
services rendered by members of a religious order in the exercise of
duties required by that order. Therefore, services rendered by members
of the Society of Jesus (a religious order of the Roman Catholic Church)
for the Georgetown Preparatory School, which is run by that religious
order, are not covered employment within the meaning of the law. Georgetown
Preparatory School, 10-EA-82.
The services performed for the Baltimore
Lutheran High School by installed ministers of religious education are
exempt from coverage under 8-208(c). Baltimore Lutheran High School, 5-EA-83.
The provisions dealing with wages were previously located in Article 95A, Section 20(n) of the Annotated Code of Maryland. After the law was revised in 1991, these provisions were recodified as Section 8-101(z) of the Labor and Employment Article of the Annotated Code.
Section 8-101(z) states that "wages" means all compensation for personal services and includes bonuses, commissions, tips and the cash value of all compensation in any medium other than cash.
Certain types of payments are excluded from the definition of "wages." Among those payments excluded are retirement payments, workers' compensation payments, payments for jury duty and travel expense reimbursement payments.
Wages - Section 8-101(z)
|I. Wages Defined
On February 1, 1991, the claimants were notified that they would be laid off. However, they would be kept on the payroll through February 28, 1991. During the month of February, the employer told the claimants that they should either report to work or visit the employer's career counseling center, which was set up by the employer in a different location. The career counseling center's only purpose was to help the employees find other jobs. All of the claimants were paid whether they reported to work, reported to the career counseling center or did neither. The claimants also received a lump sum "permanent separation amount" based on years of service. The employer produced no evidence showing what services, if any, were performed by the claimants. Since employees received payment whether or not they reported to work, there was no real requirement that these claimants report anywhere or do anything in order to receive their checks. Since the claimants did not perform services for the employer, they were not receiving "wages" and they met the definition of being "unemployed." The payments they received were dismissal payments within the meaning of Section 8-1009.
Abbott et al. v. Westinghouse Electric Corporation, 1458-BH-91.
The claimants were members of the International Longshoremen's Association
(ILA). The ILA entered into an agreement with the Steamship Trade Association
(STA) to establish a fund known as the Guaranteed Annual Income Fund (GAIF). The GAIF was created to subsidize employees, such as the claimants, whose employment opportunities had decreased. To receive GAIF benefits, the claimants were required to report each day to a central hiring hall by 7:30 a.m., at which time the doors were closed. Employees in the hall were dispatched to whatever work was available, based on seniority. Employees who were not assigned work for the day were allowed to leave after 8:30 a.m. These employees were then eligible to receive GAIF benefits for that day. Section 8-101(z)(1) defines "wages" as all compensation for personal services. In this case, no services were provided to the
STA, other than reporting to the hall for an hour each day to see if work was available. Since the claimants were not performing services, their GAIF payments were not wages as defined under Section 8-101(z) and cannot be used to establish monetary eligibility under Section 8-802.
Fusco et al. v. Steamship Trade Association, 1388-BH-91.
|II. Types of Payments
A length of service benefit, computed as three percent of the claimant's earnings for the previous year and paid at the end of the year, constitutes a bonus and therefore constitutes wages within the meaning of Section 8-101(z). The term "wages" means all remuneration for personal services including commissions and bonuses. The fact that the money was paid to the claimant by the Health Fund does not change the fact that the money was paid by reason of her personal services to the employer throughout the previous year.
Tasker v. Garrett Manufacturing Company, Inc., 634-SE-80.
B. Credit Toward Purchase of Personal Property
The claimant drove a truck for a family-owned business and was paid 20 percent of the rental fees on the truck leased by a third party. The commission was paid in the form of a credit to the claimant's account toward the purchase of the truck. The credits earned by the claimant under this arrangement constitute "wages" within the meaning of Section 8-101(z) and therefore the claimant was not "unemployed" within the meaning of Section 8-801 for the weeks in which he earned the credits.
C. Court-Awarded Damages
An employer's payment of damages to the claimant, in satisfaction of a court judgment for breach of an employment contract, does not constitute wages within the meaning of Section 8-101(z) since it was not "remuneration for personal services." The payment was the satisfaction of a debt created by a court order, as distinguished from a debt created by reason of a master-servant relationship. The fact that in the past, there was a master-servant relationship between the judgment debtor and the judgment creditor is immaterial.
Cohen v. Emergency Physician Associates, P.A., 283-BH-83.
Gasoline expenses paid to the claimant delivery driver do not constitute wages within the meaning of Section 8-101(z). The burden is on the claimant to establish which part of the remuneration he received was solely due to gasoline expenses.
Nemerov v. Ken and Ray's Service Center, 1051-BH-81.
E. Working to Repay a Debt
The claimant was formerly employed at a pay rate of $1,400 per month. After $6,000 disappeared from the employer under extremely suspicious circumstances, and the claimant gave the employer a bad check for $1,000, the claimant then acknowledged a debt to the employer of $7,000 and agreed to work for no pay for seven months for the employer to work off the debt. The claimant was taken off the books of the company on August 31, but he continued to work until December 20. The cancellation of the debt at the rate of $1,000 per month is wages within the meaning of Section 8-101(z).
Braithwaite v. Lambros Laundries, 706-BR-86.
F. Wage Amount Reported Incorrectly to Another Agency
Where the claimant's salary was fictitiously reported to the Internal Revenue Service as $250 per week in order to avoid excess withholding, but where the claimant was actually paid $650 per week, the claimant's wages for unemployment insurance purposes were $650 per week, less any amount that was actually reimbursement for expenses.
Rosenberg v. Londontown Corporation, 839-BR-86.
G. Income from Tips
Effective January 1, 1987, income from tips which is reported to the Internal Revenue Service is considered wages.
Silver v. David and Jonathan, Inc., 865-BR-86.