FAMILIES, INC. APPELLANT
DIRECTOR, DEPARTMENT OF WORKFORCE SERVICES EMPLOYER CONTRIBUTION UNIT APPELLEE
FROM THE ARKANSAS BOARD OF REVIEW [NO. 2015-BR-7EC]
Branch, Thompson, Warmath & Dale, P.A., by: Robert F.
Thompson III, for appellant.
Phyllis A. Edwards, for appellee.
F. VIRDEN, Judge
Families, Inc. ("Families") appeals from the
Arkansas Board of Review's ("Board") decision
finding that it is required to pay unemployment-insurance
taxes for the services performed by some of its workers. On
appeal, Families argues that the Board erred by not applying
the recently amended version of Arkansas Code Annotated
section 11-10-210. Families also asserts that the Board's
decision is not supported by substantial evidence. We affirm.
February 11, 2015, the Arkansas Department of Workforce
Services ("Department") issued an unemployment-tax
determination letter of liability to Families concluding that
Families' workers were its employees for purposes of
unemployment-insurance taxes. On March 2, 2015, Families
filed a letter disputing the Department findings and
requested a hearing for a redetermination of coverage by the
Department director ("Director") pursuant to
Arkansas Code Annotated section 11-10-308 (Supp. 2013). In
April 2015, the statute concerning the criteria used to
classify workers as either independent contractors or as
employees was amended. Pursuant to the amendment, in order
for an employer to show that its workers are independent
contractors, Arkansas Code Annotated 11-10-210(e) now
requires that the employer prove the first prong of the
three-prong test and only one of the other two prongs. Prior
to the amendment, the statute required that the employer
satisfy all three prongs of the test.
hearing was held on June 11, 2015. At the hearing several
Families workers testified about the services they performed
for Families and about the work they engaged in outside of
Families. Each of these four witnesses testified that he or
she provided mental-healthcare-related services for Families
and that they also worked as professionals in the mental
healthcare field outside of Families. One witness, Anne
Lehman, testified that she was employed as a school counselor
at McRae Elementary School and that she maintained a private
practice in addition to her work with Families. Stephanie
Marlowe testified that she was employed as a mental-health
therapist with Families and that she maintained a private
practice. Keith Merriweather testified that he worked for the
Veterans Administration as a veterans services
representative, and that he was a contract case manager for
Families. These workers testified that Families assigned
clients to them but that they were allowed to control the
size of their caseloads.
Thurman, the CEO for Families testified that the
"Rehabilitative Services for Persons with Mental
Illness" ("RSPMI") manual set forth the same
regulations for both employees and contract workers and that,
for purposes of the RSPMI, there was no distinction between
the two classifications of workers. Thurman testified that
the RSPMI set forth rules for accreditation, record keeping,
performance evaluations, staff competence and training, and
location of services. Thurman testified that, pursuant to the
"Professional Services Agreement, " Families
workers must get approval of any outside work they take on.
the hearing, the Director issued a decision affirming the tax
audit letter on liability and found that Families used both
traditional employees and contract workers to deliver the
outpatient services it provided and that it issued the client
assignments to both types of workers; thus, Families was
responsible for the payment of unemployment-insurance taxes
for the services performed by its mental-health professionals
and paraprofessionals classified as employees, and their
earnings constituted wages subject to unemployment taxes.
Families then appealed to the Board, which affirmed and
adopted the Director's decision in an opinion filed on
August 13, 2015. Families has now timely appealed the
Board's decision to this court.
Points On Appeal
Retroactive Application of Arkansas Code Annotated Section
first point on appeal asserted by Families is whether the
amended version of Arkansas Code Annotated section 11-10-210
should have been applied retroactively. Families argues that
the amended statute should have been applied because the
change made by the legislature was procedural rather than
substantive; thus, the amendment did not create any new
rights or obligations. Furthermore, Families argues that the
changes relate to the fiscal affairs of government and the
collection of taxes; therefore, retroactive application of a
statute is permissible. We disagree, and we affirm.
first principle of retroactivity of legislation is that
retroactivity is a matter of legislative intent. Coots v.
Bandera, 2016 Ark.App. 388, at 2-3, ___ S.W.3d ___. The
general rule is that all legislation is presumed to apply
prospectively unless the legislature expressly declares, or
necessarily implies by the language used, an intent to give a
statute retroactive effect. Id. The rule of strict
construction does not apply to remedial statutes that do not
disturb vested rights, or create new obligations, but only
supply a new or more appropriate remedy to enforce an
existing right or obligation. Bean v. Office of Child
Support Enf't, 340 Ark. 286, 297, 9 S.W.3d 520, 526
(2000). Procedural legislation is more often given
retroactive application. Id. The cardinal principle
for construing remedial legislation is for the courts to give
appropriate regard to the spirit which promoted its
enactment, the mischief sought to be abolished, and the
remedy proposed. Ark. Dep't of Human Servs. v.
Walters, 315 Ark. 204, 866 S.W.2d 823 (1993). In
addition, we have approved retroactive application of civil
statutes, especially those concerning the fiscal ...