DANCE, INC v. NEW JERSEY DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
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                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-3035-16T2

DANCE, INC.,

          Petitioner-Appellant,

v.

NEW JERSEY DEPARTMENT
OF LABOR AND WORKFORCE
DEVELOPMENT,

     Respondent-Respondent.
_____________________________

                    Argued December 19, 2018 – Decided January 14, 2019

                    Before Judges Alvarez and Reisner.

                    On appeal from New Jersey Department of Labor and
                    Workforce Development, Docket No. 13-009.

                    John D. Williams argued the cause for appellant (Law
                    Office of John D. Williams, attorneys; John D.
                    Williams, on the briefs).

                    Rimma Razhba, Deputy Attorney General, argued the
                    cause for respondent (Gurbir S. Grewal, Attorney
                    General, attorney; Melissa Dutton Schaffer, Assistant
                    Attorney General, of counsel; Rimma Razhba, on the
                    brief).
PER CURIAM

      Petitioner Dance, Inc. operates a go-go bar.1 Petitioner appeals from a

February 8, 2017 final administrative decision of the Commissioner of the New

Jersey Department of Labor and Workforce Development (Commissioner)

assessing tax liability owed under the unemployment compensation statute,

 N.J.S.A. 43:21-7.

      Petitioner argues that it is not liable for unpaid contributions to the

unemployment fund for the exotic dancers who worked at the club from 2002

through 2005, contending the dancers were independent contractors.              The

Commissioner disagreed, finding that (1) the dancers were presumed to be

employees because they worked for tips, which is a form of remuneration under

the statute, and (2) petitioner failed to satisfy any of the three prongs of the ABC

test, used to determine whether workers are employees or independent

contractors. See N.J.S.A. 43:21-19(i)(6)(A-C). Petitioner also challenges the

amount of the assessment, an issue the Commissioner addressed in his decision.

      As remedial legislation, the unemployment statute is to be interpreted

liberally. See Carpet Remnant Warehouse, Inc. v. New Jersey Dept. of Labor


1
  During the administrative hearing, petitioner's attorney repeatedly referred to
the club as a "go-go" bar. Petitioner also refers to its establishment as a
gentlemen's club.
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(CRW),  125 N.J. 567, 581 (1991). Although the agency's legal interpretations

are not binding on us, we will defer to the Commissioner's reasonable

construction of the statute the agency is charged with enforcing. See Van Sickle

v. Bd. of Review,  372 N.J. Super. 460, 463-64 (App. Div. 2004) (citing Van

Dalen v. Washington Twp.,  120 N.J. 234, 245 (1990)); CRW,  125 N.J. at 587.

We will not disturb the Commissioner's factual findings so long as they are

supported by substantial credible evidence. Brady v. Bd. of Review,  152 N.J.
 197, 210 (1997). After reviewing the record with those legal standards in mind,

we affirm substantially for the reasons stated in the Commissioner's final

decision. We add these comments.

      The statute defines "employment" as any service "performed for

remuneration or under any contract of hire, written or oral, express or implied."

 N.J.S.A. 43:21-19(i)(1)(A).    The statute defines "remuneration" broadly to

include "all compensation for personal services, including commission and

bonuses and the cash value of all compensation in any medium other than cash."

 N.J.S.A. 43:21-19(p). Under the statute, wages paid by the employer are a form

of remuneration.  N.J.S.A. 43:21-19(o). However, tips or "gratuities" are also a

form of remuneration. See  N.J.S.A. 43:21-19(o); N.J.A.C. 12:16-4.1(b)(9)




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(including tips and gratuities in a list of "remuneration issues"); N.J.A.C. 12:16-

4.9.

       In this case, the dancers who worked at petitioner's club were paid

exclusively in the form of tips they received from the customers. Petitioner

required the dancers to sign a purported "Stage Rental/License Agreement"

defining the dancers as independent contractors and requiring them to "lease"

the right to use the club's stage. However, the agreement did not set forth any

rental amount, and it was written in English. When the agency's auditors visited

the club, they found that the dancers spoke exclusively Spanish or Portuguese.

       Although petitioner received notice of an audit in January 2006, when the

auditors visited the club later that year petitioner had no documentation about

the dancers. According to Minesh Patel, the auditor who testified at the hearing,

the club's owner, Patrick Loprete, explained to him that the club did not keep

records about the dancers, because they were illegal immigrants from Brazil and

other South American countries. In rebuttal testimony, Loprete denied having

that conversation with Patel, but he did not deny that the dancers were

undocumented immigrants who spoke no English. Petitioner did not present

testimony from any former or current dancers who worked at the club.




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      In his testimony, Loprete claimed that the dancers were independent

contractors who took no direction from him or the club manager, showed up

whenever they pleased, and had no obligation to work any particular schedules.

However, the club's website featured photographs of dozens of scantily-dressed

women, under the web page heading "Our Girls." The website also provided

schedules of the dancers who were to appear at the club each day. While Loprete

denied that the work of the dancers was integral to the club's business, he

admitted that there were dancers performing at the club every afternoon and

evening.

      Neither the administrative law judge (ALJ) nor the Commissioner found

petitioner's evidence credible or sufficient. Based on the complete lack of

documentation or other corroboration for petitioner's contentions, the

Commissioner agreed with the ALJ that petitioner could not satisfy any of the

prongs of the ABC test. N.J.S.A. 43:21-19(i)(6)(A-C).

      Pursuant to  N.J.S.A. 43:21-19(i)(6), "[s]ervices performed by an

individual for remuneration shall be deemed to be employment" unless the

putative employer proves each of three prongs:

            (A) Such individual has been and will continue to be
            free from control or direction over the performance of
            such service, both under his contract of service and in
            fact; and

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                                      5
            (B) Such service is either outside the usual course of
            the business for which such service is performed, or
            that such service is performed outside of all the places
            of business of the enterprise for which such service is
            performed; and

            (C) Such individual is customarily engaged in an
            independently established trade, occupation, profession
            or business.

            [N.J.S.A. 43:21-19(i)(6)(A-C) (emphasis added).]

      We find no basis to second-guess the Commissioner's factual findings,

which are supported by substantial credible evidence. Petitioner's argument –

that the work of exotic dancers is marginal, rather than integral, to its business

– is frivolous. The contention is belied by petitioner's corporate name, its

website, and the description of the club's operation.

      Petitioner's additional appellate arguments are without sufficient merit to

warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.




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