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Svihel Vegetable Farm, Inc. v. Department of Employment and Economic Development

Supreme Court of Minnesota

June 12, 2019

Svihel Vegetable Farm, Inc., Appellant,
v.
Department of Employment and Economic Development, Respondent.

          Court of Appeals Office of Appellate Courts

          Susan E. Gaertner, Richard C. Landon, Amanda M. Sicoli, Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota, for appellant.

          Lee B. Nelson, Anne B. Froelich, Minnesota Department of Employment and Economic Development, Saint Paul, Minnesota, for respondent.

         SYLLABUS

         Because H-2A and J-1 visa workers perform agricultural services that constitute "covered agricultural employment" under Minn. Stat. § 268.035, subd. 11(a) (2018), the wages a farm paid to H-2A and J-1 visa workers performing those services are subject to unemployment-insurance taxation.

         Affirmed.

          OPINION

          GILDEA, Chief Justice.

         The question presented in this case is whether appellant Svihel Vegetable Farm, Inc. must pay unemployment-insurance taxes on the wages it paid to workers who hold H-2A and J-1 visas. The Minnesota Department of Employment and Economic Development determined that the wages Svihel Farm pays to these workers are subject to unemployment-insurance taxation. An unemployment-law judge agreed with the Department's determination, and the court of appeals affirmed. We granted Svihel Farm's petition for review. Because the court of appeals correctly concluded that Svihel Farm owes the taxes, we affirm.

         FACTS

         Svihel Farm grows and sells fruits and vegetables. In 2010, the farm began hiring H-2A and J-1 nonimmigrant visa holders (collectively, visa workers).[1] H-2A and J-1 visas are temporary nonimmigrant visas issued to foreign nationals who have sponsors in the United States that allow the foreign nationals to engage in certain types of work, and in the case of J-1 visa workers, certain other activities.[2] Richard D. Steel, Steel on Immigration Law §§ 3:15, 3:18 (2018-2019 ed. 2018). The visa workers Svihel Farm sponsors help with planting and harvesting crops as well as selling products at farmers' markets.

         In 2016, the Department of Employment and Economic Development (DEED) conducted an audit of Svihel Farm's records and determined that the farm owed $154, 726 in unpaid unemployment-insurance taxes, mostly on the wages of the H-2A and J-1 visa workers that the Farm employed from 2012 to 2015.[3] Svihel Farm appealed DEED's determination, contending that the visa workers' wages are not subject to unemployment-insurance taxation under Minnesota law. An unemployment-law judge conducted a hearing in March and April 2017 and ruled in favor of DEED.

         Svihel Farm appealed to the court of appeals, and that court affirmed the decision of the unemployment-law judge. Svihel Vegetable Farm, Inc. v. Dep't of Emp't & Econ. Dev., 915 N.W.2d 501, 502 (Minn.App. 2018). Specifically, the court of appeals concluded that, because the visa workers performed "agricultural labor" under the relevant federal laws, their work fell within the Minnesota unemployment-insurance tax statute's definition of "agricultural employment." Id. at 503. Accordingly, the court of appeals held that Svihel Farm must pay unemployment-insurance taxes on the wages Svihel Farm paid to its visa workers. Id. at 505. We granted Svihel Farm's petition for review.

         ANALYSIS

         On appeal, Svihel Farm argues that the court of appeals erroneously interpreted state and federal statutes that govern the payment of unemployment-insurance taxes. Statutory interpretation presents a question of law that we review de novo. Engfer v. Gen. Dynamics Advanced Info. Sys., Inc., 869 N.W.2d 295, 300 (Minn. 2015). The goal of statutory interpretation "is to ascertain and effectuate the intention of the legislature." Minn. Stat. § 645.16 (2018).[4]

         Before turning to the specifics of the parties' arguments, we begin with a discussion of the provisions in state and federal law that are at issue in this case. Federal law is relevant because Minnesota statutes governing ...


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