Mr. Domanski and his wife emigrated to the United States from Germany in the ‘40’s when they were already in their 50’s. They lived in a cabin on the shores of Black Lake in Michigan. The cabin was owned by Domanski’s son-in-law, Mr. Gougeon. Gougeon had met his future wife, Domanski’s daughter, while stationed in Germany with the United States military.

In order to earn room and board for himself and his wife, Mr. Domanski performed a variety of chores around the premises owned by Gougeon. These tasks included: construction, painting, shingling, building fences, cutting logs, building and maintaining a breakwater, and other odd jobs.

In 1956, Domanski asked his son-in-law if he could earn some money in exchange for his services, in addition to earning his keep. Gougeon agreed, and for the next three years he paid Domanski $5 per week for his services, in addition to providing him and his wife room and board. This arrangement continued until July 1959, when Domanski reached retirement age. At that time it was assumed that Domanski would become eligible to draw social security benefits based on the twelve quarters of compensated work he had performed for Gougeon.

But the social security agency disagreed. Following a hearing on the matter, the Hearing Examiner held that there was no employer/employee relationship between Domanski and Gougeon.

In making this ruling, the Examiner noted several pertinent facts: 1) Gougeon had not withheld FICA taxes on Domansk’s weekly earnings, 2) Gougeon had continued to claim Domanski as a dependent on his tax returns, 3) the nature of Domanski’s services had not changed from the prior several years in which he did not receive beyond room and board, and 4) Domanski continued to provide the same types of services without monetary compensation after July, 1959.

In effect, the payment of $5 per week by Gougeon to Domanski during the years 1956 to 1959 appeared to the Hearing Examiner to be a contrived arrangement to help his father-in-law achieve the twelve quarters of credit he needed to qualify for social security benefits, rather than a bona fide employment relationship.

This outcome was reversed on appeal by Domanski to the federal district court. However, the Sixth Circuit Court of Appeals ultimately held in favor of the agency, noting that the standard of review on appeal was whether or not the Hearing Examiner’s findings and any reasonable inferences drawn therefrom were supported by substantial evidence in the record. The Court held that they were.

See Domanski v. Celebrezze, 323 F.2d 882 (6th Cir. 1963), cert. denied, 84 S.Ct. 980, March 23rd, 1964.

See also Social Security Ruling (SSR) 64-61c.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.