Total and Partial Unemployment TPU 415.2
Family Enterprise
In deciding whether a claimant is an employee or an independent contractor, the most important factor is, who has the right to control the manner and means of accomplishing the result desired. To be considered self-employed the claimant must have this control over his/her enterprise. If this control is exercised by another, the claimant is an employee. A self-employed claimant is "unemployed" under the terms of Section 1252 of the Code.
The fact that a claimant is working in a family enterprise does not automatically make him/her a self-employed individual. One member of a family can be hired by another just as an outsider can be hired. Whenever there is such a contract of hire there is employment.
For example, in Benefit Decision 6477 a claimant, a food processor and floor lady, worked in the food processing industry. She worked for her husband, the sole proprietor of a hydrating plant. The hydrating plant also employed others. The claimant and her husband were unaware that she could not be an employee of his for contribution purposes. The Board said:
"Bryant's Hydrating Plant, owned and operated by the claimant's husband, was an employer within the meaning of the Unemployment Insurance Code. . . Employees may perform services for an employer in both subject and nonsubject employment . . . The claimant was regularly employed in this plant by her husband; and, although the remuneration paid to her for her services was not wages for contribution purposes, it was compensation to be considered in determining whether the claimant was unemployed . . ."
Particularly on farms, but to a certain extent in other types of work, children will work for their parents without a formal contract of hire or set compensation.
Persons so engaged are employees, and not independent contractors since the parents control the means of accomplishing the desired results.