Highlights of Noteworthy Decisions

Decision 2509 15
S. Netten
  • Board Directives and Guidelines (earnings basis)
  • Earnings basis (dependent contractor)

A dependent contractor appealed a decision of the Appeals Resolution Officer regarding the earnings basis for calculation of benefits.

Rather than using gross business income, which would overstate earnings, or net business income, which would understate earnings, the Board starts with net business income and then adds back certain expenses that are largely personal or theoretical in nature. Board policy contains a list of items that should be added back, including "other items as appropriate." That category is not a catch-all for all deductions made from overall business income. To be appropriately added back, these other items must have an analogous personal or theoretical component, such that the dependent contractor's real earnings may be said to include those amounts. Further, the inclusion of the listed add-back items is only required to the extent that they have actually been expensed against gross business income. It would not be appropriate to add back items which were not used to reduce business income.
In this case, the Board correctly added back expenses for business use of the home and did not add back specific business expenses, such as supplies, travel and business portion of meals. The appeal was dismissed.