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Final Order
Hearings Unit: Final Order
 
BEFORE THE COMMISSIONER
OF THE BUREAU OF LABOR AND INDUSTRIES
OF THE STATE OF OREGON
 
In the Matter of
Case Number 08-97
JEWEL SCHMIDT
dba Bit of Country Care
Respondent

 
FINDINGS OF FACT
ULTIMATE FINDINGS OF FACT
CONCLUSIONS OF LAW
OPINION
ORDER
 

 
SYNOPSIS
 
Respondent, who operated an adult care home, failed to pay wage claimant all wages (including overtime) due upon termination, in violation of ORS 652.140(2). Contrary to Respondent´s contentions, the Commissioner determined that claimant was an employee and that no deduction for meals, lodging, facilities, or other services was permitted because Respondent failed to establish the fair market value of those services or that they were provided for the claimant´s private benefit. Respondent´s failure to pay the wages was willful, and the Commissioner ordered her to pay civil penalty wages, pursuant to ORS 652.150. ORS 652.140(2), 652.150, 653.261, and OAR 839-20-025, 839-20-030, 839-050-0330.
 

 
The above-entitled contested case came on regularly for hearing before Douglas A. McKean, designated as Administrative Law Judge by Jack Roberts, Commissioner of the Bureau of Labor and Industries for the State of Oregon. The hearing was held on Tuesday, December 10, 1996, in the Bureau of Labor and Industries offices, 3865 Wolverine Street NE, Salem, Oregon.
 
The Bureau of Labor and Industries (the Agency) was represented by Alan McCullough, an employee of the Agency. Wage Claimant Kristina Gorst (formerly Taylor) was present throughout the hearing. Jewel Schmidt (Respondent), after being duly notified of the time and place of this hearing, failed to appear in person or through a representative.
 
The Agency called the following witnesses: Charlene King, a claims adjuster with Midland Risk Insurance Company; Margaret Pargeter, a screener with the Wage and Hour Division of the Agency; Kristina Gorst (Claimant); Carol Smith, Claimant´s mother in law; Nancy Warehime, Claimant´s sister in law; and Wendy Taylor, Claimant´s step mother. Administrative exhibits X-1 to X-21 and Agency exhibits A-1 to A-10 were offered and received into evidence. The record closed on December 10, 1996.
 
Having fully considered the entire record in this matter, I, Jack Roberts, Commissioner of the Bureau of Labor and Industries, hereby make the following Findings of Fact (Procedural and on the Merits), Ultimate Findings of Fact, Conclusions of Law, Opinion, and Order.
 
 
1)On October 10, 1995, Claimant filed a wage claim with the Agency. She alleged that she had been employed by Respondent and that Respondent had failed to pay wages earned and due to her. At the same time that she filed the wage claim, Claimant assigned to the Commissioner of Labor, in trust for Claimant, all wages due from Respondent. (Exhibits A-1, A-2; Testimony of Claimant)
2)On May 29, 1996, the Agency served on Respondent an Order of Determination based upon the wage claim filed by Claimant and the Agency´s investigation. The Order of Determination found that Respondent owed Claimant a total of $3,725 in wages and $1,200 in civil penalty wages. Respondent filed a timely answer in which she denied the allegations in the Order of Determination; denied that Claimant was her employee; alleged that she could charge Claimant for rent, food, and utilities; and alleged that she could not afford to pay Claimant any wages at the time Claimant worked for her. (Exhibits X-2, X-3, X-4)
3)On August 19, 1996, the Hearings Unit issued a Notice of Hearing to the Respondent, the Agency, and Claimant indicating the time and place of a hearing on September 19, 1996. Together with the Notice of Hearing, the forum sent a document entitled "Notice of Contested Case Rights and Procedures" containing the information required by ORS 183.413, and a copy of the forum´s contested case hearings rules, former OAR 839-50-000 to 839-50-420. (Exhibits X-1, X-5, X-11)
4)On August 28, 1996, the Administrative Law Judge issued a discovery order to the participants directing them each to submit a summary of the case, including a list of the witnesses to be called, and the identification and description of any physical evidence to be offered into evidence, together with a copy of any such document or evidence, according to the provisions of former OAR 839-50-210(1). The Administrative Law Judge also granted an Agency motion to compel discovery and ordered Respondent to provide certain documents to the Agency. The Agency submitted a timely summary of the case and later supplemented it. (Exhibits X-6, X-7, X-8, X-14, X-16, X-17, X-18, X-20, X-21)
5)On September 4, 1996, the Hearings Unit received Respondent´s first request for a postponement of the hearing. Her reason for needing a postponement was that she had an adult care home and could not find a relief person for the date of hearing or successive days. The Agency opposed the request and said it was ready to proceed and had subpoenaed witnesses. The Administrative Law Judge denied Respondent´s request, pursuant to former OAR 839-50-150(5), because Respondent had not shown good cause for a postponement. The ALJ noted that there were over 30 days between the date the Notice of Hearing was issued and the date of the scheduled hearing, and this should have been ample time to find a relief person for the expected one-day hearing. The ALJ permitted Respondent to renew her request, but directed her to provide detailed information about her attempts to find a relief person or other information to establish good cause for a postponement. (Exhibits X-9, X-10, X-12)
6)On September 16, 1996, the Hearings Unit received Respondent´s second request for a postponement of the hearing. She needed a postponement because she had been involved in a motor vehicle accident and was bedridden. She provided documentary and photographic evidence to support her request. The Agency did not oppose the request and the ALJ granted it. The ALJ later issued an Amended Notice of Hearing resetting the hearing for December 10, 1996. (Exhibits X-15, X-17, X-19)
7)At the time and place set forth in the Amended Notice of Hearing, Respondent did not appear or contact the Agency or the Hearings Unit. Pursuant to OAR 839-050-0330, the Administrative Law Judge waited 30 minutes before resuming the hearing. At that time, Respondent had still not appeared or contacted the Agency or the Hearings Unit. The ALJ then found Respondent in default as to the Order of Determination and proceeded with the hearing. The next day, December 11, 1996, the ALJ received a voice mail message from Respondent saying that she mistakenly thought the hearing was set for December 13, 1996. The ALJ notified her by letter that she was in default, instructed her how to request relief from default, and set a deadline of December 20, 1996, for the request. The Hearing Unit received no request for relief from default from Respondent. (Exhibit X-22)
8)On January 17, 1997, the Administrative Law Judge issued a Proposed Order in this matter. Included in the Proposed Order was an Exceptions Notice that allowed ten days for filing exceptions. The Hearings Unit received no exceptions.

FINDINGS OF FACT -- THE MERITS
 
1)During all times material, Respondent owned and operated an adult foster care home in Lafayette, Oregon, called "Bit of Country Care Home" (the home). (Exhibit A-6)
2)On June 5, 1995, Respondent was injured in a motor vehicle accident. On that same day, Respondent hired Claimant as an alternate care provider. The agreed rate of pay was $5.00 per hour. (Exhibits A-1, A-3, A-4, A-6, A-8, A-9, A-10; Testimony of Claimant, King, Smith, Warehime, Taylor)
3)Claimant´s duties included cooking meals for the residents of the home, cleaning, doing laundry, helping some residents to dress and get in and out of beds and chairs, emptying bed pans, changing beds, and helping residents with their medications. At times, Claimant also cleaned Respondent´s personal sections of the home and baby-sat Respondent´s three children. (Exhibit A-1; Testimony of Claimant)
4)Throughout her employment with Respondent, Claimant, her year-old son, and (periodically for around a month and a half) her husband lived in the home. Living at the home was a condition of Claimant´s employment since she had to be available at night and other hours to assist the residents. During meal breaks, Claimant was not relieved of all duties. While employed by Respondent, Claimant received food stamps, with which she bought food for herself and her son. Occasionally, Claimant contributed items of food for the residents when Respondent did not provide them. Claimant and her son also ate food provided by Respondent. Claimant asked Respondent whether she (Claimant) could contribute to the monthly food for the home, and Respondent told her not to worry about it. Respondent never asked Claimant to contribute or gave her a bill for food. Claimant often prepared her and her son´s meals separately from those she prepared for the residents or for Respondent´s children. She reimbursed Respondent for long distance telephone calls she made. Respondent never charged Claimant, by way of deductions from wages or in the form of wages, for the value of meals, lodging, or other facilities or services furnished to Claimant. Claimant never authorized in writing any deduction from her wages. (Exhibits A-7, A-8 (p. 33); Testimony of Claimant, Smith, Warehime)
5)Respondent kept no time records for Claimant. Claimant kept a contemporaneous record of her time worked and duties in a monthly planner. Claimant´s records and testimony, which are accepted as fact, reveal that between June 5 and September 20, 1995, she worked a total of 686.5 hours, 117 of which were hours worked in excess of 40 hours per week. She earned $2,847.50 in straight time wages (569.5 hours times $5.00 per hour) and $877.50 in overtime wages (117 hours times $7.50 per hour, the overtime rate of pay), for total wages earned of $3,725. Respondent paid Claimant nothing. Throughout Claimant´s employment, Respondent told her she would get paid when Respondent received money from her insurance company in a settlement from the motor vehicle accident. (Exhibits A-3, A-4, A-5, A-8; Testimony of Claimant, Warehime, Pargeter, Taylor)
6)On September 20, 1995, Claimant quit without notice. (Exhibit A-10; Testimony of Claimant)
7)Civil penalty wages were computed, in accordance with ORS 652.150 and Agency policy, as follows: $5.00 (Claimant´s hourly rate) multiplied by 8 (hours per day) equals $40.00. This figure of $40.00 is multiplied by 30 (the maximum number of days for which civil penalty wages continued to accrue) for a total of $1,200. This figure is set forth in the Order of Determination. (Exhibit X-2; Testimony of Pargeter; Official Notice)
8)Respondent did not provide any evidence for the record of a financial inability to pay Claimant´s wages at the time they accrued. (Entire Record)
9)Claimant´s testimony was credible. She had the facts readily at her command and her statements were supported by documentary records. There is no reason to determine the testimony of the Claimant to be anything except reliable and credible.


 
1)During all times material herein, Respondent was a person doing business as Bit of Country Care Home in the State of Oregon. She employed one or more persons in the operation of that business.
2)Respondent employed Claimant as an alternate care provider from June 5 to September 20, 1995. The agreed rate of pay was $5.00 per hour.
3)Claimant quit without notice on September 20, 1995.
4)During the period June 5 to September 20, 1995, Claimant worked a total of 686.5 hours, 117 of which were hours worked in excess of 40 hours per week. She earned $3,725. Respondent has paid Claimant nothing for those hours of work.
5)Respondent willfully failed to pay Claimant all wages due within five days, excluding Saturdays, Sundays, and holidays, after she quit and more than 30 days have elapsed from the date her wages were due.
6)Respondent made no showing that she was financially unable to pay Claimant´s wages at the time they accrued.
7)Civil penalty wages, computed in accordance with ORS 652.150 and Agency policy, equal $1,200.


 
1)During all times material herein, Respondent was an employer and Claimant was an employee subject to the provisions of ORS 652.110 to 652.200, 652.310 to 652.414, and 653.010 to 653.261.
2)The Commissioner of the Bureau of Labor and Industries has jurisdiction over the subject matter and the Respondent herein. ORS 652.310 to 652.414.
3)ORS 653.261(1) provides:
"The commissioner may issue rules prescribing such minimum conditions of employment, excluding minimum wages, in any occupation as may be necessary for the preservation of the health of employees. Such rules may include, but are not limited to, minimum meal periods and rest periods, and maximum hours of work, but not less than eight hours per day or 40 hours per week; however, after 40 hours of work in one week overtime may be paid, but in no case at a rate higher than one and one-half times the regular rate of pay of such employees when computed without benefit of commissions, overrides, spiffs and similar benefits."
OAR 839-20-030(1) provides in part:
"[A]ll work performed in excess of 40 hours per week must be paid for at the rate of not less than one and one-half times the regular rate of pay when computed without benefit of commissions, overrides, spiffs, bonuses, tips or similar benefits pursuant to ORS 653.261(1)."
Respondent was obligated by law to pay Claimant one and one-half times her regular hourly rate for all hours worked in excess of 40 hours per week. Respondent failed to so pay Claimant, in violation of OAR 839-20-030(1).
4)ORS 652.140(2) provides:
"When an employee who does not have a contract for a definite period quits employment, all wages earned and unpaid at the time of quitting become due and payable immediately if the employee has given to the employer not less than 48 hours´ notice, excluding Saturdays, Sundays and holidays, of intention to quit employment. If notice is not given to the employer, the wages shall be due and payable within five days, excluding Saturdays, Sundays and holidays, after the employee has quit, or at the next regularly scheduled payday after the employee has quit, whichever event first occurs."
Respondent violated ORS 652.140(2) by failing to pay Claimant all wages earned and unpaid within five days, excluding Saturdays, Sundays, and holidays, after Claimant quit employment without notice.
5)ORS 652.150 provides:
"If an employer willfully fails to pay any wages or compensation of any employee whose employment ceases, as provided in ORS 652.140 and 652.145, then, as a penalty for such nonpayment, the wages or compensation of such employee shall continue from the due date thereof at the same hourly rate for eight hours per day until paid or until action therefor is commenced; provided, that in no case shall such wages or compensation continue for more than 30 days from the due date; and provided further, the employer may avoid liability for the penalty by showing financial inability to pay the wages or compensation at the time they accrued."
Respondent is liable for a civil penalty under ORS 652.150 for willfully failing to pay all wages to Claimant when due as provided in ORS 652.140.
6)Under the facts and circumstances of this record, and according to the law applicable to this matter, the Commissioner of the Bureau of Labor and Industries has the authority to order Respondent to pay Claimant her earned, unpaid, due, and payable wages and the civil penalty wages, plus interest on both sums until paid. ORS 652.332.


 
Default
Respondent failed to appear at the hearing and thus defaulted to the charges set forth in the Order of Determination. In a default situation, pursuant to ORS 183.415(5) and (6), the task of this Forum is to determine if a prima facie case supporting the Agency´s Order of Determination has been made on the record. See In the Matter of John Cowdrey, 5 BOLI 291, 298 (1986); In the Matter of Art Farbee, 5 BOLI 268, 276 (1986); In the Matter of Judith Wilson, 5 BOLI 219, 226 (1986); see also OAR 839-050-0330(2).
Where a respondent submits an answer to a charging document, the forum may admit the answer into evidence during a hearing and may consider the answer´s contents when making findings of fact. Where a respondent fails to appear at hearing, the forum may review the answer to determine whether the respondent has set forth any evidence or defense to the charges. In the Matter of Jack Mongeon, 6 BOLI 194 (1987); In the Matter of Richard Niquette, 5 BOLI 53 (1986). In a default situation where a respondent´s total contribution to the record is a request for a hearing and an answer that contains nothing other than unsworn and unsubstantiated assertions, those assertions are overcome wherever they are controverted by other credible evidence on the record. Mongeon, supra.
 
The Agency has established a prima facie case. A preponderance of the credible evidence on the whole record showed that Respondent employed Claimant during the period of the wage claim and willfully failed to pay her all wages, earned and payable, when due. That evidence, which established that Respondent owes Claimant $3,725, was credible, persuasive, and the best evidence available, given Respondent´s failure to appear at the hearing. Having considered all the evidence on the record, the prima facie case has not been contradicted or overcome.
 
The record establishes that Respondent has violated ORS 652.140(2) as alleged and that she owes Claimant civil penalty wages pursuant to ORS 652.150.
 
Claimant Worked As An Employee
In her answer, Respondent denied that Claimant was her employee. Evidence to the contrary is persuasive and unrebutted.
 
"´Employee´ means any individual who otherwise than as a copartner of the employer or as an independent contractor renders personal services wholly or partly in this state to an employer who pays or agrees to pay such individual at a fixed rate * * *." ORS 652.310(2); Lamy v. Jack Jarvis & Co., Inc., 281 Or 307, 574 P2d 1107, 1111 (1978); In the Matter of Crystal Heart Books Co., 12 BOLI 33, 40-41 (1993).
 
The unrebutted evidence shows that Respondent hired Claimant to work at the home at the fixed rate of $5.00 per hour. Respondent´s own insurance claim form, signed by her on June 12, 1995, shows that she hired an employee to help her, beginning June 5, 1995, at $5.00 per hour. It shows 62 hours worked by the employee between June 5 and 11. Based on the definition of "employee," the forum finds that Claimant worked for Respondent as an employee between June 5 and September 20, 1995, not as a copartner or independent contractor.
 
Hours Worked
This forum has ruled repeatedly that it is the employer´s duty to maintain an accurate record of an employee´s time worked. ORS 653.045; In the Matter of Godfather´s Pizzeria, Inc., 2 BOLI 279, 296 (1982) (citing Anderson v. Mt. Clemens Pottery Co., 328 US 680 (1946)). ORS 653.045 requires an employer to maintain payroll records. Where the forum concludes that an employee was employed and was improperly compensated, it becomes the employer´s burden to produce all appropriate records to prove the precise amounts involved. Mt. Clemens Pottery Co.; In the Matter of Dan´s Ukiah Service, 8 BOLI 96, 106 (1989). Where the employer produces no records, the Commissioner may rely on the evidence produced by the Agency "to show the amount and extent of [the employee´s] work as a matter of just and reasonable inference," and "may then award damages to the employee, even though the result be only approximate." Mt. Clemens Pottery Co., 328 US at 687-688.
 
Here, Respondent kept no records of Claimant´s work. Based on the rulings cited above, the forum may rely on the evidence produced by the Agency regarding the number of hours worked and rate of pay for Claimant. The Agency has the burden of first proving that the employee "performed work for which [she] was improperly compensated." The burden of proving the amount and extent of that work can be met by producing sufficient evidence from which a just and reasonable inference may be drawn. This forum has previously accepted, and will accept, the testimony of a claimant as sufficient evidence to prove such work was performed and from which to draw an inference of the extent of that work -- where that testimony is credible. See In the Matter of Sheila Wood, 5 BOLI 240, 254 (1986); Dan´s Ukiah Service, 8 BOLI at 106. Here, Claimant´s testimony and other evidence was credible. The forum concludes that Claimant was employed and was improperly compensated, and the forum may rely on the evidence produced by the Agency regarding the number of hours worked and rate of pay for Claimant. Respondent did not produce persuasive "evidence to negative the reasonableness of the inference to be drawn from the employee´s evidence." Mt. Clemens Pottery Co., 328 US at 687-88.
 
Meals, Lodging, Facilities, or Other Services
In her answer, Respondent claimed that she agreed to let Claimant and her son live with her for free (that is, free rent, electricity, and food) in exchange for Claimant´s help with the care of the residents. Respondent claimed she could charge Claimant $2,925 for her rent, electricity, heat, and food. Credible evidence contradicts Respondent´s claims and she presented no evidence to support them. Claimant denied that she had any such agreement with Respondent.
 
Former OAR 839-20-025 (BL 3-1992) provided that, under some circumstances, an employer could deduct from the minimum wage the fair market value of meals, lodging, and other facilities or services furnished by the employer to an employee for the private benefit of the employee. Even if there were evidence that Respondent and Claimant had such an agreement, Respondent did not comply with the requirements of the law and therefore could not take advantage of its provisions. For example, she did not make a full settlement of sums owed to her by Claimant for meals, etc., on each regular payday. OAR 839-20-025(3). There is no evidence that she complied with the statute regulating deductions from wages -- ORS 652.610(3). OAR 839-20-025(4)(a). A key provision of the deductions statute provides that no employer may withhold, deduct, or divert any portion of an employee´s wages unless the deductions are authorized in writing by the employee, are for the employee´s benefit, and are recorded in the employer´s books. ORS 652.610(3)(b). Here, the unrebutted evidence is that Claimant never authorized in writing any deductions from her wages. Further, evidence shows that the lodging was not for Claimant´s private benefit, as used in OAR 839-20-025, because Claimant lived in the home as a condition of employment. OAR 839-20-025(4)(c), (6); In the Matter of Rainbow Auto Parts and Dismantlers, 10 BOLI 66, 72-73 (1991) (OAR 839-20-025 provides that facilities or services furnished by the employer as a condition of employment shall not be considered to be for the private benefit of the employee); In the Matter of Ashlanders Senior Foster Care, Inc., 14 BOLI 54, 74-75, 81 (1995) (employee´s presence as a caregiver during meals and at night was for the employer´s benefit and not for the employee´s private benefit, and therefore the value of lodging and meals would not constitute a setoff from wages owed). Finally, Respondent offered no evidence of the fair market value of any of the meals or other facilities or services provided to Claimant. The forum will not speculate about such values.
 
Penalty Wages
Awarding penalty wages turns on the issue of willfulness. Willfulness does not imply or require blame, malice, wrong, perversion, or moral delinquency, but only requires that that which is done or omitted is intentionally done with knowledge of what is being done and that the actor or omittor be a free agent. Sabin v. Willamette Western Corp., 276 Or 1083, 557 P2d 1344 (1976). Respondent, as an employer, had a duty to know the amount of wages due to her employee. McGinnis v. Keen, 189 Or 445, 221 P2d 907 (1950); In the Matter of Jack Coke, 3 BOLI 238, 242 (1983). Here, evidence established that Respondent knew she was not paying Claimant wages for her work and intentionally failed to pay any wages. Evidence showed that Respondent acted voluntarily and was a free agent. Respondent must be deemed to have acted willfully under this test, and thus is liable for penalty wages under ORS 652.150.
 
Financial Inability
Respondent alleged that she was financially unable to pay Claimant. This forum has repeatedly held that it is a respondent´s burden to show the respondent´s financial inability to pay a claimant´s wages. See ORS 652.150, 183.450(2), and OAR 839-050-0260(3). See also In the Matter of Jorrion Belinsky, 5 BOLI 1, 9-10 (1985); In the Matter of Mega Marketing, 9 BOLI 133, 138 (1990). Respondent failed to show that she was financially unable to pay Claimant´s wages at the time they accrued and cannot escape penalty wage liability.


 
NOW, THEREFORE, as authorized by ORS 652.332, the Commissioner of the Bureau of Labor and Industries hereby orders JEWEL SCHMIDT to deliver to the Fiscal Services Office of the Bureau of Labor and Industries, 800 NE Oregon Street, Portland, Oregon 97232-2162, the following:
A certified check payable to the Bureau of Labor and Industries IN TRUST FOR KRISTINA GORST in the amount of FOUR THOUSAND NINE HUNDRED AND TWENTY FIVE DOLLARS ($4,925), less appropriate lawful deductions, representing $3,725 in gross earned, unpaid, due, and payable wages and $1,200 in penalty wages; plus
a) Interest at the rate of nine percent per year on the sum of $3,725 from October 1, 1995, until paid, plus
b) Interest at the rate of nine percent interest per year on the sum of $1,200 from November 1, 1995, until paid.
 
DATED this ____ day of ________________, 1997.
 
JACK ROBERTS, Commissioner
Bureau of Labor and Industries
 
JUDICIAL NOTICE
Pursuant to ORS chapter 183, you are entitled to judicial review of this Final Order. To obtain judicial review, you must file a Petition for Judicial Review with the Court of Appeals in Salem, Oregon, within sixty (60) days of the issuance of this Final Order. If you file a Petition for Judicial Review, you must also serve a copy of the Petition on the BUREAU OF LABOR AND INDUSTRIESand THE DEPARTMENT OF JUSTICE -- APPELLATE DIVISIONat the following addresses:
 
BUREAU OF LABOR AND INDUSTRIES
HEARINGS UNIT
1005 STATE OFFICE BUILDING
800 NE OREGON STREET # 32
PORTLAND, OREGON 97232-2162
 
DEPARTMENT OF JUSTICE
APPELLATE DIVISION
400 JUSTICE BUILDING
SALEM, OREGON 97310