Board of Review Decision 352-NDRK-JD7M

The employer is an LLC owned by the claimant’s son. Because neither the claimant nor the employer could show the LLC had elected to be treated as an s-corp for federal tax purposes, it is considered to be the same taxable entity as the claimant’s son. As such, the claimant’s base period wages from this employer may not be used towards monetary eligibility for his claim, because they are exempt pursuant to G.L. c. 151A, § 6(d).

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Issue ID: 352-NDRK-JD7M

Board of Review Decision

Introduction and Procedural History of this Appeal 

The claimant appeals a decision by a review examiner of the Department of Unemployment Assistance (DUA) to deny unemployment benefits. We review, pursuant to our authority under G.L. c. 151A, § 41, and affirm. 

The claimant separated from his position with the employer on November 14, 2025. He filed a claim for unemployment benefits with the DUA, effective November 9, 2025, which was denied in a determination issued on December 5, 2025. The claimant appealed the determination to the DUA hearings department. Following a hearing on the merits attended only by the claimant, the review examiner affirmed the agency’s initial determination and denied benefits in a decision rendered on February 3, 2026. We accepted the claimant’s application for review.

Benefits were denied after the review examiner determined that the claimant’s base period wages could not be used in determining his monetary eligibility for benefits under G.L. c. 151A, 
§ 24(a), because he worked in the employ of his son, and, thus, his wages were exempt under G.L. c. 151A, § 6(d). After considering the recorded testimony and evidence from the hearing, the review examiner’s decision, and the claimant’s appeal, we remanded the case to the review examiner to obtain additional information about the employer’s tax filing status. Only the claimant attended the remand hearing. Thereafter, the review examiner issued her consolidated findings of fact. Our decision is based upon our review of the entire record.

The issue before the Board is whether the review examiner’s decision, which concluded that the claimant’s base period wages from the instant employer were exempt, is supported by substantial and credible evidence and is free from error of law.

Findings of Fact

The review examiner’s consolidated findings of fact and credibility assessment are set forth below in their entirety:

1. The claimant does not know if the employer filed an IRS Form 2553 electing to pay taxes as an S-corporation. 
2. The claimant does not know if the employer is taxed as an S-corporation. 
3. The claimant does not have any documents to show how the employer pays taxes. 
4. The claimant and his son, who is the employer, have had relationship difficulties in the past. 
5. The claimant’s son, the employer, told the claimant at hire not to “get into his business.” 
6. The employer’s Legal Entity Type is listed as “LLC (Corporation)” in the Department of Unemployment Assistance’s online record-keeping system. 

Credibility Assessment: 

The claimant’s testimony during the remand hearing was consistent with his original testimony. The claimant credibly testified that he does not have any information about the employer’s tax status. The claimant offered candid and forthcoming testimony that he and his son have had difficulties in their relationship in the past and that upon hiring the claimant for work did not want any interference by the claimant in the business. 

While the agency’s online record-keeping system lists the employer’s legal entity type as LLC (Corporation), based on the lack of information supplied by the claimant, it is not clear if this is currently accurate or up to date.

Ruling of the Board

In accordance with our statutory obligation, we review the record and the decision made by the review examiner to determine: (1) whether the consolidated findings are supported by substantial and credible evidence; and (2) whether the review examiner’s conclusion is free from error of law. Upon such review, the Board adopts the review examiner’s consolidated findings of fact and deems them to be supported by substantial and credible evidence. We further believe that the review examiner’s credibility assessment is reasonable in relation to the evidence presented. As discussed more fully below, we believe that the review examiner’s consolidated findings of fact support the conclusion that the claimant’s wages may not be used in determining his monetary eligibility for benefits. 

In order to be eligible for unemployment benefits, the claimant must have earned wages amounting to at least thirty times his weekly benefit rate and at least $6,300.00 in his base period. G.L. c. 151A, § 24(a). Wages are defined under G.L. c. 151A, § 1(s), which provides, in relevant part, as follows: 

1. “Wages”, every form of remuneration of an employee subject to this chapter for employment by an employer, . . . 

The claimant’s testimony was that he was not an owner or member of the employer company; he was an employee. However, because the claimant’s son owned the company, we must also consider whether the wages he earned were for services that are exempt under G.L. c. 151A, 
§ 6(d). SeeConsolidated Finding 4. In relevant part, G.L. c. 151A, § 6, provides as follows: 

The term “employment” shall not include: . . . (d) Service performed by an individual in the employ of his son, daughter or spouse, . . . 

Because the employer company is owned by the claimant’s son, the review examiner correctly concluded that the claimant’s services were exempt under G.L. c. 151A, § 6(d).

At the time that the claimant filed his unemployment claim, the employer was operating as a limited liability company (LLC). Consolidated Finding 6. The default tax treatment of an LLC is as a sole proprietorship (single-member LLC) or a partnership (two or more member LLC), unless the LLC files a tax form, Form 8832, with the IRS electing to be treated as a corporation for tax purposes.

On remand, we afforded both parties the opportunity to present proof that the employer filed a Form 8832 and elected to be treated as a corporation for federal tax purposes, or to present other tax filings showing the employer LLC was taxed as a corporation. However, neither party provided this information. SeeConsolidated Findings 1–3. As such, we treat the employer as its default status of a sole proprietorship. Since the claimant’s son owns this company, we must apply G.L. c. 151A, § 6(d), to the claimant’s base period wages. 

We, therefore, conclude as a matter of law that the claimant’s base period wages from the instant employer were exempt pursuant to G.L. c. 151A, § 6(d), and they may not be used to satisfy the monetary eligibility requirements of G.L. c. 151A, § 24(a).  

The review examiner’s decision is affirmed. The claimant’s base period wages are exempt. 

Boston, Massachusetts                                              Date of Decision – April 9, 2026

1. G.L. c. 151A, § 24(a), states that a claimant must have earned $2,000.00 in the base period. However, this amount changes periodically, as required under the statute, based on changes to the minimum wage. The minimum amount of wages needed for a valid unemployment claim at the time the claimant filed his 2025 claim was $6,300.00.
2. The claimant’s testimony in this regard, although not explicitly incorporated into the review examiner’s findings of fact, is part of the unchallenged evidence introduced at the hearing and placed in the record, and it is thus properly referred to in our decision today. See Bleich v. Maimonides School, 447 Mass. 38, 40 (2006); Allen of Michigan, Inc. v. Deputy Dir. of Department of Employment and Training, 64 Mass. App. Ct. 370, 371 (2005).
3. See also the Federal Unemployment Tax Act (FUTA), which contains the same language as G.L. c. 151A, § 6(d). 26 U.S.C. § 3306(c)(5).
4. 26 C.F.R. § 301.7701-3 (the “check-the-box” regulation); Unemployment Insurance Program Letter No. 26-08 (Sept. 8, 2008), p. 1. 

Charlene A Stawicki, Esquire
Member

Michael J. Albano
Member

Any further appeal would further appeal further appeal would be to a Massachusetts State District Court
(See Section 42, Chapter 151A, General Laws, Enclosed)

The last day to appeal this decision to a Massachusetts District Court is thirty days from the mail date on the first page of this decision. If that thirtieth day falls on a Saturday, Sunday, or legal holiday, the last day to appeal this decision is the business day next following the thirtieth day.

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Please be advised that fees for services rendered by an attorney or agent to a claimant in connection with an appeal to the Board of Review are not payable unless submitted to the Board of Review for approval, under G.L. c. 151A, § 37.

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