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Monument Staffing, LLC v. Dep't of Unemployment Assistance

Appeals Court of Massachusetts

July 9, 2015

Monument Staffing, LLC
v.
Department of Unemployment Assistance

Editorial Note:

This decision has been referenced in an "Appeals Court of Massachusetts Summary Dispositions" table in the North Eastern Reporter. And pursuant to its rule 1:28, As Amended by 73 Mass.App.Ct. 1001 (2009) are primarily addressed to the parties and, therefore, may not fully address the facts of the case or the panel's decisional rationale. Moreover, rule 1:28 decisions are not circulated to the entire court and, therefore, represent only the views of the panel that decided the case. A summary decision pursuant to rule 1:28, issued after February 25, 2008, may be cited for its persuasive value but, because of the limitations noted above, not as binding precedent. See Chace v. Curran, 71 Mass.App.Ct. 258, 260 N.4, 881 N.E.2d 792 (2008).

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

The plaintiff appeals after a Superior Court judge denied its motion for judgment on the pleadings and affirmed four decisions of a Department of Unemployment Assistance (DUA) review examiner. The review examiner concluded that the plaintiff was liable for a fair share contribution for four different quarters. At issue on appeal is the interpretation of the regulation that, during the relevant time period, governed fair share contributions when an employee's hours fluctuate but are mostly full time. See 114.5 Code Mass. Regs. § 16.00 (2009). More specifically, the question before us is whether the DUA's interpretation of the phrase " date of hire" for a " full time employee" was reasonable. The plaintiff's temporary employees work in temporary staffing placement positions.

It is undisputed that the plaintiff had more than fifty employees and did not have seventy-five percent of its full-time employees enrolled in the group health plan it offered for any of the quarters at issue. We start with the relevant language from the regulation. An employer that has more than eleven full-time equivalent employees and that " is not a Contributing Employer as determined under 114.5 Code Mass. Regs. § 16.03(3) shall pay a per Employee" fair share contribution (emphasis supplied). Under 114.5 Code Mass. Regs. § 16.03(1),

" An Employer is a Contributing Employer if:

" a. for an Employer with more than 50 full-time equivalent employees:

" i. its percentage of Full-Time Employees enrolled is at least 25% and it meets the premium contribution standard ; or

" ii. its percentage of Full-Time Employees enrolled is at least 75%" (emphasis supplied).

114.5 Code Mass. Regs. § 16.03(3)(e)(1).[1]

The premium contribution standard is defined as follows: " an Employer must offer to make a premium contribution of at least 33% of the cost of an employer sponsored Group Health Plan offered to all of its Full-Time Employees no more than ninety days after the date of hire." 114.5 Code Mass. Regs. § 16.03(3)(d). Finally, a full time employee is defined by the regulation in pertinent part as: " an Employee that works . . . 35 or more hours per week." 114.5 Code Mass. Regs. § 16.02.

The DUA asserts that the date of hire as a full-time employee for an employee whose hours fluctuate is the first week where the employee works a full-time schedule. Under this interpretation, to comply with the premium contribution standard, an employer must offer to make a premium contribution no later than ninety days after the first week of full-time work. This requirement applies if the employee continues to work a full-time schedule for the majority of the weeks in a quarter or for just under thirteen weeks. The plaintiff, however, asserts that an employee, whose hours fluctuate, is hired as a full-time employee at the end of a quarter when that employee has worked an average of thirty-five hours per week. Under this interpretation, the employer is in compliance with the premium contribution standard if it offers employer sponsored health care within ninety days of the end of the quarter to appropriate employees.[2]

" We give deference to the decision of an agency interpreting its own regulations. . . . We do 'not intrude lightly within the agency's area of expertise,' . . . as long as the regulations are interpreted with reference to their purpose and to the purpose and design of the controlling statute." Friends & Fishers of the Edgartown Great Pond, Inc. v. Department of Envtl. Protection, 446 Mass. 830, 837, 848 N.E.2d 393 (2006) (citation omitted). See Tri-County Youth Programs, Inc. v. Acting Deputy Director of Div. of Employment, 54 Mass.App.Ct. 405, 408, 765 N.E.2d 810 (2002), quoting from Finkelstein v. Board of Registration in Optometry, 370 Mass. 476, 478, 349 N.E.2d 346 (1976) (" Where the agency's rules are concerned, the agency's interpretation is entitled to great weight, unless those interpretations are 'arbitrary, unreasonable or inconsistent with the plain terms of the rule itself'" ). Here, the plain language of the regulation does not indicate how the premium contribution standard should apply to employees whose hours fluctuate. The purpose of the controlling statute is to " more equitably distribut[e] the costs of health care provided to uninsured residents of the commonwealth." G. L. c. 149, § 188( b ).[3] The design of the statute requires that those employers who are not contributing, under a definition to be assigned in a regulation, pay a per employee contribution. The rate of such contribution is calculated annually based upon several data points related to the uncompensated care pool, but which cannot exceed $295 per year per employee. See G. L. c. 149, § 188( a )-( c ).

The DUA's interpretation requires an employer of such an employee to offer health insurance at the earliest possible date under the plain language of the regulation in order for the employer to be considered a contributing employer. This interpretation is consistent with the purpose and design of the statute. The statute requires employers to contribute to the cost of uninsured individuals, who are employed in the State generally, if the employer does not " make a fair and reasonable premium contribution" to insurance for its employees. G. L. c. 149, § 188( a ).[4] The DUA's interpretation of date of hire for these types of employees is also a reasonable interpretation under the terms of the regulation. As a result, we must apply the DUA's interpretation.

Applying the DUA's interpretation, which the review examiner adopted, we must determine whether the decisions were supported by substantial evidence and a correct application of that interpretation. See G. L. c. 30A, § 14(7). " 'Substantial evidence' means such evidence as a reasonable mind might accept as adequate to support a conclusion." G. L. c. 30A, § 1(6), inserted by St. 1954, c. 681, § 1. The review examiner concluded that the plaintiff did not " offer its subsidized group health plan to all of its full-time employees no more than ninety days after hire" for the first quarter of 2011, the third quarter of 2011, and the fourth quarter of 2011. This conclusion was based on the employer's testimony as well as the quarterly reported wage spreadsheets submitted by the employer. The review examiner also identified employees who were not offered health insurance within ninety days of their first week of full-time employment who also continued to work a full-time schedule for a majority of weeks within the following ninety days. We have reviewed the testimony and the spreadsheets and conclude that there was substantial evidence to support the determination that the plaintiff did not technically meet the premium contribution standard and, therefore, is not a contributing employer under the definition of the regulation. See 114.5 Code Mass. Regs. § 16.03(3)(d) & (e)(1).

Finally, for the second quarter of 2011, the review examiner determined that the plaintiff was not a contributing employer because the plaintiff failed to enroll twenty-five percent of its full-time employees in its group health plan.[5] However, the determination that the employer was not a contributing employer was also supported by the same rationale that was applied to the other quarters. The defendant has identified sample employees who were not offered health insurance within ninety days of their first week of full-time employment and who also continued to work a full-time schedule for a majority of the following weeks. We affirm the DUA's decision regarding the second quarter based on the rationale relied upon and applied to the three other quarters. See Franklin Office Park Realty Corp. v.Commissioner of the Dept. of Envtl. Protection, 466 Mass. 454, 466, 995 N.E.2d 785 (2013) (" Under [the G. L. c. 30A, ...


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