[Vendorsmi] do the BEP promulgated rules really matter?

Tue Feb 14 14:14:56 UTC 2012

Again worth a repeat here. But this does go to issues such as workmen's comp, etc.
http://www.ag.state.mi.us/opinion/datafiles/1990s/op06882.htm

Opinion #6882

The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site

- www.ag.state.mi.us)

STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6882

November 29, 1995

COMMISSION FOR THE BLIND:

Operators of vending stands in government owned buildings

Blind vending stand operators under the Michigan Commission for the Blind Business Enterprise Program are not state employees.

Lowell W. Perry

Director

Michigan Department of Labor

P.O. Box 30015

Lansing, MI 48909

You have asked if blind vending stand operators under the Michigan Commission for the Blind Business Enterprise Program are state employees. You indicate

your question is prompted by the claims of some operators that they are employees of the State of Michigan and, thus, do not have to comply with state

laws applicable to employers concerning paying unemployment compensation taxes and providing workers' compensation insurance.

Under 1978 PA 260, MCL 393.351 et seq; MSA 17.581(1) et seq (Act), the Michigan Commission for the Blind operates a program designed to aid blind and visually

handicapped individuals. Section 9 of the Act requires that "[a] concession in a building or on property owned or occupied by this state shall be operated

by a blind person." I have previously concluded under this Act that blind persons have the exclusive authority to operate concessions in state owned buildings,

OAG, 1989-1990, No 6651, p 356, 357 (July 24, 1990), and that the Department of Management and Budget may not charge rent for the operation of a concession

by a blind person. OAG, 1981-1982, No 5940, p 279 (August 4, 1981).

In order to carry out the mandates of the Act, the Commission for the Blind has established a Business Enterprise Program (BEP). In section 13 of the Act,

the Legislature has also designated the Commission to implement the Randolph Sheppard vending stand act, 20 USC Sec. 107 et seq. This is a federally funded

state program that seeks to provide opportunities to blind individuals by placing them in vending facilities in various government buildings. Under section

5(g) of the Act, the Commission for the Blind has promulgated administrative rules to implement the BEP. 1983 AACS, R 393.101 et seq.

This office has been informed that following evaluation, training, and other services, a blind person is placed as an operator in the BEP running a concession

in a government building. The operator and the Commission for the Blind enter into a contract that provides, among other things, that the operator will

pay a certain percentage of the concession profits to the Commission in what is called a set-aside fee. The Commission, in turn, will provide supervision

and advice, needed equipment, and an initial stock of goods. The operator sets his own prices and purchases his own stock after the initial stock is provided.

The operator must obtain a comprehensive liability insurance policy. The operator may hire other individuals as employees and is required to provide workers'

disability compensation coverage for any employees hired. Rule 393.107(c).

Under the contract between the operator and the Commission for the Blind, the operator is not paid by the State of Michigan for performing work for the

state. Rather, operators receive the proceeds from the operations of their vending facilities after paying their operating costs and set-aside fees. Rule

393.106(2).

If the blind vendors were state employees, it would be necessary for the Civil Service Commission to classify them in the classified state civil service

in accordance with Const 1963, art 11, Sec. 5, which provides, in part:

The classified state civil service shall consist of all positions in the state service except those filled by popular election, heads of principal departments,

members of boards and commissions, the principal executive officer of boards and commissions heading principal departments, employees of courts of record,

employees of the legislature, employees of the state institutions of higher education, all persons in the armed forces of the state, eight exempt positions

in the office of the governor, and within each principal department, when requested by the department head, two other exempt positions, one of which shall

be policy-making. The civil service commission may exempt three additional positions of a policy-making nature within each principal department.

It has been held that except to the extent that a position may be exempt under this section, all employees of the state are required to be classified into

the state civil service. Commissioner of Insurance v Michigan State Accident Fund, 173 Mich App 566, 582; 434 NW2d 433 (1988), lv den 433 Mich 872 (1989).

The position of vending stand operator has never been exempted from the classified state civil service or classified in the state civil service by the

Civil Service Commission.

Blind concession operators are included within the state employees' retirement system. Section 13a of 1943 PA 240, MCL 38.13a; MSA 3.981(13a) provides in

part:

Effective January 1, 1973, blind or partially sighted persons licensed as vending stand operators within the controlled programs of the bureau of blind

services are deemed to be employees within the meaning of this act for state retirement purposes only, and except as hereinafter provided are entitled

to all the rights and benefits of state employees covered by the provisions of this act. [ Emphasis added.]

The language "for state retirement purposes only" evidences an intent that blind vending stand operators are not considered state employees for general

purposes.

It is clear that blind vending operators in the BEP are clients rather than employees of the Michigan Commission for the Blind. With the exception of those

services provided by the Commission in accordance with the Act and implementing administrative rules, the operators are independent concessionaires with

the authority, in their capacities as employers, to employ other persons.

It is my opinion, therefore, that blind vending stand operators under the Michigan Commission for the Blind Business Enterprise Program are not state employees.

Frank J. Kelley

Attorney General

http://opinion/datafiles/1990s/op06882.htm

State of Michigan, Department of Attorney General

Last Updated 11/10/2008 16:49:34

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  ----- Original Message ----- 
  From: Joe Sontag 
  To: David Robinson 
  Cc: VENDORSMI List 
  Sent: Tuesday, February 14, 2012 6:02 AM
  Subject: Re: [Vendorsmi] do the BEP promulgated rules really matter?

  I reject the claim that the training is the problem where operator compliance is concerned.  Most of the serious violations are happening at the hands of experienced operators in the employer responsibility area, they are willful and they happen mostly because there are no consequences unless the operator in question has done things to anger BEP administration, such as help protect another operator's rights.  I have been penalized for operating a business properly and for showing the financials as they were, not as I always wished they could be, and I have seen operators receive promotion points for "training" based on nothing more than their word and I am sick and tired of sitting on my ass and telling myself that it will all just work out somehow.  The PAs have a job that is defined by both the Civil Service and by our promulgated rules, yet Cannon, Zanger, Hull and god knows who else work harder at getting their responsibilities reduced than they do at strengthening and growing our program.  Remember, the topic includes both operators and the agency and, in my opinion, there's more than enough blame to go around.  As free as certain highly regarded operators are free to break the law and rip off the program, the BEP administration is even more free to ignore or break the rules and sell the program down the river, at no risk to themselves.

  This is not a sheltered rehab shop, this is not a blindy pity party, this is an employment program, one that gives blind adults the opportunity to provide real service in exchange for real financial compensation, consistent with applicable laws, all of which they agree to as a condition of participation in the program.  If the BEP dies, it will be hard to distinguish between the effects of operator exploitation and BEP staff indifference and incompetence when trying to determine the cause of death.

    ----- Original Message ----- 
    From: David Robinson 
    To: 'Joe Sontag' ; 'NFB of Michigan Vendors List' 
    Sent: Monday, February 13, 2012 10:50
    Subject: RE: [Vendorsmi] do the BEP promulgated rules really matter?

    Dear Joe, 

       This is an excellent example of the problem throughout the program.  Larry does a good job of pointing out that part of the agency's role is to help the operator to stay in full compliance.  This is not a one sided issue however.  The agency has an obligation to adhere to the rules as well.  To carry out their responsibility as the SLA and to move a blind person from rehabilitation to employment.  In today's BEP, I suspect that the problem does not mean an unwillingness to follow the rules, but the training or lack of training, that operators have been given. I also contend that some of the rules are outdated and lacking any understanding of how the business world works.  If the training was good then many of the rules would not be necessary.  Finally, why is the discussion of rules only about the operator?  The agency is willing to break them when they need to do so.

    Dave Robinson

----------------------------------------------------------------------------

    From: vendorsmi-bounces at nfbnet.org [mailto:vendorsmi-bounces at nfbnet.org] On Behalf Of Joe Sontag
    Sent: Monday, February 13, 2012 9:18 AM
    To: VENDORSMI List
    Cc: Steve Arwood
    Subject: [Vendorsmi] do the BEP promulgated rules really matter?

    I now offer you a clue as to why the Business Enterprise Program is so fouled up.  Listen carefully to the following discussion on the topic "Operators/Agency Staff consistently following rules as they are
    written," which is one of the issues before the ad hoc.  Mr. Hull's remarks are extremely revealing, as is the vote that was taken near the end of the session.

    This may be downloaded at the link below:

    http://dl.dropbox.com/u/22266576/Ad%20hoc%20%2002032012%20excerpt1.MP3

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