Unemployment Compensation — Self-employment — Unemployment — Claimants officers and controlling shareholders of corporation — Ignoring corporate entity — Unemployment Compensation Law.
1. In an unemployment compensation case, in which it appeared that claimants were all employes of a family who were involved in a business together; that each owned 40 shares of stock in the company, which had 205 shares outstanding, and all three were officers of the company; that the officers of the company, during periods of insufficient work to employ all the members of the family, held a meeting and by majority vote decided which member should be "laid off"; and that for the period in question it was decided that claimants should be "laid off" because it was their respective turns; it was Held that claimants were self-employed and that they were not eligible for benefits under the Unemployment Compensation Law.
2. DePriest Unemployment Compensation Case,
196 Pa. Super. 612, followed.
Argued March 5, 1962.
OPINION BY MONTGOMERY, J., March 21, 1962:
The appellants are all members of a family who are involved in the wrecking business together. Each owns 40 shares of stock in the company which has 205 outstanding shares, and all three are officers of the company. The officers of the company, during periods of insufficient work to employ all the members of the family, hold a meeting and by majority vote decide which members shall be "laid off". It was decided by majority vote of all the stockholders that the appellants would be "laid off" because it was their respective turns. Immediately thereafter claims for unemployment compensation benefits were filed by the three appellants. The Bureau of Employment Security denied the claims on the grounds that the appellants were self-employed. Upon appeal the referee reversed the bureau and held the appellants to be entitled to benefits. The Board of Review reversed the referee's decision, holding that the appellants had sufficient control to lay themselves off and that they did just that. Therefore the appellants were self-employed and must be denied eligibility for benefits under section 402 (h) and section 402 (b)(1) of the law.
This case is ruled by DePriest Unemployment Compensation Case, 196 Pa. Super. 612, 177 A.2d 20, in which this Court held that the corporate entity may be ignored in determining whether the claimants, in fact, were "unemployed" under the act, or were self-employed persons whose business merely proved to be unremunerative during the period for which the claim for benefits was made.
Decisions affirmed.