APPEAL from a decision of the Unemployment Insurance Appeal Board, filed November 25, 1953, which (1) determined that appellants are employers liable for contributions under article 18 of the Labor Law and (2) sustained a determination of the Industrial Commissioner assessing appellants with contributions for the period from January 1, 1947, through December 31, 1952.
Howard L. Kuttner for appellants.
Nathaniel L. Goldstein, Attorney-General (Francis
R. Curran and Wendell P. Brown of counsel), for respondent.
The Southern District Court Reporters, the appellant, is a copartnership consisting of the sixteen official court reporters for the United States District Court for the Southern District of New York. The reporters are appointed by the District Court Judges and receive a fixed annual salary. The reporters formed the partnership, with the permission of the Judges, in order to facilitate the work of transcribing the records of judicial proceedings and also to enable them to carry on private stenographic work.
The firm regularly employs six typists and two clerical workers. All fees obtained from the sale of transcripts and the compensation received from private work are placed in a common pool from which the salaries of the typists and clerks and other expenses are paid and the net proceeds are then divided among the members of the partnership.
About 95% of the total work performed by the partnership consists of the preparation of the transcripts of official proceedings. The remaining 5% consists of private work. The appellant concedes that it is liable for unemployment insurance contributions computed upon 5% of the partnership payroll,
corresponding to the proportion of the work of the firm which is so-called private work, but it challenges the determination of the Unemployment Insurance Appeal Board that it is liable for contributions based upon its entire payroll.
The United States is, of course, not liable for the payment of unemployment insurance contributions with respect to the salaries paid by it to the court reporters. The United States is not an 'employer' within the meaning of the Unemployment Insurance Law (Labor Law, § 512). The appellant argues from this that it is exempt from liability for contributions with respect to the compensation paid to its staff for work performed in producing transcripts of official proceedings. The appellant relies upon subdivision 2 of section 560 of the Labor Law which reads as follows: 'Hirings by helpers and assistants. Whenever any helper, assistant, or employee of an employer engages any other person in the work which said helper, assistant, or employee is doing for the employer, such employer shall for all purposes hereof be deemed the employer of such other person, whether such person is paid by the said helper, assistant, or employee, or by the employer, provided the employment has been with the knowledge, actual, constructive, or implied, of the employer.'
In our opinion, this subdivision has no bearing upon the case. This subdivision applies only to persons hired by an employee of an 'employer', as that term is defined in the statute. Since the United States is not an 'employer' within the statutory definition, subdivision 2 of section 560 has no application here at all.
The obvious purpose of the subdivision is to extend the coverage of the Unemployment Insurance Law with respect to employers who come within the statutory definition. Such employers, by force of the subdivision, are made liable for contributions for assistants hired by their employees. Also, the assistants are to be counted in determining whether the employer has employed a total of four or more persons. But the provision has no application to employers who are completely excluded from the statutory definition.
However, apart from the provisions of subdivision 2 of section 560, a question may be raised as to whether the assistants hired by the court reporters were, in fact, employees of the United States. It seems plain to us that they were not. First of all, there was no statutory or administrative authority for their employment and they could ...