is the decision of the Railroad Retirement
Board regarding whether the services performed
by JC for the Mississippi & Skuna Valley
Railroad Company (M&SV) constitute employee
service under the Railroad Retirement and
Railroad Unemployment Insurance Acts. The
M&SV is an employer (BA 3549) under
the Acts administered by the Board. JC is
an employee of Weyerhaeuser, a publicly
traded integrated forest products company.
Weyerhaeuser Corporation owns the M&SV.
According to an Employee Questionnaire regarding
the activities of JC supplied by Ms. Rachel
Tutor, Financial Services Manager for Weyerhaeuser
Corporation, JC provides financial and clerical
support for the M&SV. Her duties include
daily way billing, interline freight accounting,
financial statement preparation, and answering
the telephone. JC has a radio in her office
by which she monitors and communicates with
the railroad crew when they are away from
the depot. JC performs her duties in a Weyerhaeuser
office building that is less than 100 yards
from the M&SV depot. JC provides services
for both Weyerhaeuser and the M&SV.
Approximately 50% of her time is spent on
M&SV activities. The M&SV does not
reimburse Weyerhaeuser for JC's services.
Section 1(b) of the Railroad Retirement
Act and section 1(d)(1) of the Railroad
Unemployment Insurance Act both define a
covered employee as an individual in the
service of an employer for compensation.
Section 1(d) of the Railroad Retirement
Act further defines an individual as "in
the service of an employer" when:
(i)(A) he is subject to the continuing
authority of the employer to supervise and
direct the manner of rendition of his service,
or (B) he is rendering professional or technical
services and is integrated into the staff
of the employer, or (C) he is rendering,
on the property used in the employer’s
operations, personal services the rendition
of which is integrated into the employer’s
(ii) he renders such service for compensation
* * *.
Section 1(e) of the Railroad Unemployment
Insurance Act contains a definition of service
substantially identical to the above, as
do sections 3231 (b) and 3231 (d) of the
Railroad Retirement Tax Act (26 U.S.C.
§ 3231 (b) and (d)). Paragraph (A)
of the definition dates from the inception
of the railroad retirement system. SeePublic
Law No. 162, 75th Cong., Ch. 382, Part 1,
(50 Stat. 307).
In Reyolds v. Northern Pacific Railway,
168 F. 2d 934 (8th Cir. 1948), the Eighth
Circuit stated that for purposes of liability
for taxes under the analogous provision
of the Railroad Retirement Tax Act, persons
performing services for a railroad may be
regarded as railroad employees, even though
they are not directly employed or directly
paid by the railroad. Id. at 942. The Court
further stated that the intent of parties
to the contract to avoid coverage, the historical
practice of the railroad industry, and factors
deciding the employment relationship under
other Federal laws should all be considered.
Id at 940-941. Under other federal laws,
numerous factors are involved in determining
whether an individual is engaged in employee
service. In the absence of judicial authority
directly interpreting the employee service
provisions of the Railroad Retirement Act,
these factors may be useful in determining
application of those provisions. An individual
may not be self-employed where the employer
furnishes without charge the supplies and
premises for the work. See Henry v. United
States, 452 F. Supp. 253, 255 (E.D. Tenn.,
1978). Payment on an hourly basis rather
than at a specified amount per job also
indicates that the individual is an employee.
See Bonney Motor Express, Inc. v. United
States, 206 F. Supp. 22, 26 (E.D. Va., 1962).
An independent contractor offers his service
to the general public rather than to a specific
employer. See May Freight Service, Inc.
v. United States, 462 F. Supp. 503, 507
(E.D. N.Y., 1978). Similarly, an independent
contractor generally may substitute another
individual to perform the contract work,
while an employee must perform the work
himself. Gilmore v. United States, 443 F.
Supp. 91, 97 (D. Md., 1977).
JC provides services to the M&SV, and
those services are directly integrated into
the management and operation of the railroad
employer. Therefore, the Board finds that
JC is integrated into the employer’s
staff or operations, as is specified in
paragraph (B) and (C).
Under section 211.16(a) of the Board's
regulations (20 CFR 211.16(a)), the period
of time within which compensation may be
reported is limited to four years after
the date on which such compensation is required
to be reported to the Board. The four-year
rule is subject to certain exceptions including
the case "Where the earnings were erroneously
reported to the Social Security Administration
in the good faith belief by the employer
or employee that such earnings were not
covered under the Railroad Retirement Act
* * *" (section 211.16(b)(ii)). However,
no employee may be credited with service
months or tier II compensation beyond the
four-year period unless the appropriate
railroad retirement taxes have been paid
Accordingly, it is the decision of the
Board that JC's services for the Mississippi
& Skuna Valley Railroad Company is employee
service. Consequently, such service is creditable
under the Railroad Retirement and Railroad
Unemployment Insurance Acts insofar as is
permitted by section 211.16.