<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=Content-Type content="text/html; charset=windows-1252">
<META content="MSHTML 6.00.2900.6169" name=GENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY bgColor=#ffffff>
<DIV>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt">http://www.ag.state.mi.us/opinion/datafiles/1990s/op06882.htm</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Opinion #6882</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><?xml:namespace prefix = o ns =
"urn:schemas-microsoft-com:office:office" /><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">- www.ag.state.mi.us)</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">STATE OF MICHIGAN</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">FRANK J. KELLEY, ATTORNEY
GENERAL</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Opinion No. 6882</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">November 29, 1995</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">COMMISSION FOR THE BLIND:</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Operators of vending stands in
government owned buildings</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Blind vending stand operators
under the Michigan Commission for the Blind Business Enterprise Program are not
state employees.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Lowell W. Perry</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Director</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Michigan Department of Labor</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">P.O. Box 30015</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Lansing, MI 48909</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">You have asked if blind vending
stand operators under the Michigan Commission for the Blind Business Enterprise
Program are state employees. You indicate</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">laws applicable to employers
concerning paying unemployment compensation taxes and providing workers'
compensation insurance.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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,</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">by a blind person. OAG,
1981-1982, No 5940, p 279 (August 4, 1981).</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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,</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">state program that seeks to
provide opportunities to blind individuals by placing them in vending facilities
in various government buildings. Under section</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">The operator must obtain a
comprehensive liability insurance policy. The operator may hire other
individuals as employees and is required to provide workers'</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">disability compensation coverage
for any employees hired. Rule 393.107(c).</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">state. Rather, operators receive
the proceeds from the operations of their vending facilities after paying their
operating costs and set-aside fees. Rule</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">393.106(2).</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">in accordance with Const 1963,
art 11, Sec. 5, which provides, in part:</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">The classified state civil
service shall consist of all positions in the state service except those filled
by popular election, heads of principal departments,</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">members of boards and
commissions, the principal executive officer of boards and commissions heading
principal departments, employees of courts of record,</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">employees of the legislature,
employees of the state institutions of higher education, all persons in the
armed forces of the state, eight exempt positions</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">be policy-making. The civil
service commission may exempt three additional positions of a policy-making
nature within each principal department.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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).</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Civil Service Commission.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">part:</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Effective January 1, 1973, blind
or partially sighted persons licensed as vending stand operators within the
controlled programs of the bureau of blind</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">services are deemed to be
employees within the meaning of this act for state retirement purposes only, and
except as hereinafter provided are entitled</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">to all the rights and benefits of
state employees covered by the provisions of this act. [ Emphasis added.]</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">The language "for state
retirement purposes only" evidences an intent that blind vending stand operators
are not considered state employees for general</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">purposes.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">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</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">services provided by the
Commission in accordance with the Act and implementing administrative rules, the
operators are independent concessionaires with</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">the authority, in their
capacities as employers, to employ other persons.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">It is my opinion, therefore, that
blind vending stand operators under the Michigan Commission for the Blind
Business Enterprise Program are not state employees.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Frank J. Kelley</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Attorney General</P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt">http://opinion/datafiles/1990s/op06882.htm</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">State of Michigan, Department of
Attorney General</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Last Updated 11/10/2008
16:49:34</P></DIV></BODY></HTML>