Opinion
W.C. No. 4-383-141
August 31, 1999.
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Martinez (ALJ) insofar as it determined the claimant's average weekly wage. The respondents contend the ALJ erred in considering the value of veterinary services which the employer provided to the claimant free of charge. We agree, and therefore, remand the matter for a redetermination of the average weekly wage.
The claimant was employed as an assistant in a veterinary hospital. She earned a "base wage" of $6.70 per hour and worked twenty hours per week. In addition, the employer contributed "matching funds" to the claimant's 401K plan and provided free veterinary care for the claimant's pets.
At the hearing a document entitled "Compensation Summary November 1997" was introduced into evidence. This summary was apparently prepared by the employer. The document indicates the employer paid the claimant $10,160 in total compensation of which $3,430 was attributed to "vet services." The document also indicates the claimant worked 698 hours, and calculates her "hourly comp" as $14.56. The claimant testified she was unsure of the value of free veterinary care and that it varied from year to year depending on the number of animals she had and their individual needs. (Tr. p. 12).
Under the circumstances, the ALJ concluded the value of the veterinary care services should be included in calculating the claimant's average weekly wage. Relying on the "Compensation Summary" the ALJ found the respondent employer "placed a cash equivalent value" on the services. Consequently, the ALJ multiplied the claimant's hourly wage plus the assigned value of the 401K contributions and veterinary services times twenty hours per week and found the claimant's average weekly wage was $291.20.
On review, the respondents contend the ALJ erred in including the value of veterinary services when calculating the average weekly wage. The respondents argue that veterinary services are not an enumerated fringe benefit which may be included in the average weekly wage under § 8-40-201(19)(b), C.R.S. 1998. Further, the respondents argue the veterinary services do not have a "reasonable, present-day cash equivalent value" sufficient to be considered the equivalent of "wages" under § 8-40-201(19)(a), C.R.S. 1998. The respondents point out the value of the veterinary services was dependent on the claimant's actual usage and could decline over time. We agree with the respondents.
The respondents correctly argue that veterinary services are not one of the enumerated fringe benefits which may be included in the claimant's average weekly wage pursuant to § 8-40-201(19)(b). The statute expressly provides that the average weekly wage "shall not include any similar advantage or fringe benefit not specifically enumerated" in subsection (19)(b). Thus, the value of the services may not be included in the claimant's average weekly wage unless they constitute a "cash equivalent" under the doctrine announced in Meeker v. Provenant Health Partners, 929 P.2d 26 (Colo.App. 1996).
In Meeker, the court held that some types of non-cash or deferred compensation benefits are "cash equivalents" which may be considered "wages" because they are part of the "money rate at which the services rendered are to be recompensed under the contract of hire." Section 8-49-201 (19) (a). In order for a benefit to be considered "wages" under the statute the court determined that it must have a "reasonable, present-day, cash equivalent value," and the claimant must have access to the benefit on a day-to-day basis, or an immediate expectation interest in receiving the benefit under appropriate, reasonable circumstances. The Meeker court concluded that "personal employee time" (PET) constituted "wages" under this test because the claimant earned it at a fixed rate for each hour worked. Further, once the claimant earned the PET time, it was never forfeited and could be taken as fully compensated sick leave, vacation leave, or converted to cash when the employment ended.
Subsequently, in City of Lamar v. Koehn, 968 P.2d 164 (Colo.App. 1998) the court concluded that vacation and sick leave earned by the claimant did not constitute "cash equivalents" for purposes of § 8-40-201(19)(a). In Koehn, the earned sick leave and vacation time were subject to forfeiture if the claimant accrued a specified maximum number of leave days. In light of the forfeiture provision the court concluded the vacation and sick leave did not constitute "wages" under the Meeker test because the value of the time was "dependent upon actual usage" and could decline if the time was not used.
Applying these principles here, we conclude the evidence does not support the ALJ's conclusion that the veterinary services had a "reasonable, present-day, cash equivalent value." Section 8-43-301(8), C.R.S. 1998 (ICAP may set aside an order which is not supported by the evidence and is contrary to law). As the respondents argue, the "value" to be assigned the services could decline depending on the claimant's rate of usage. The claimant herself conceded the value of the services varied from year to year depending on how many pets she had and their need for treatment. In fact, the value of this fringe benefit could decline to nothing if the claimant ceased ownership of the pets or if the pets did not need any treatment. Neither was the value of the services tied to the number of hours which the claimant actually worked.
The mere fact the claimant used the services during the year before her injury and that the employer assigned a value to the services does not require a different result. In City of Lamar v. Koehn, supra, the claimant never forfeited any sick leave or vacation time and was paid his full entitlement. Nevertheless, the court held the possibility that the claimant could forfeit vacation or sick time rendered their value so speculative they could not be considered "cash equivalents" under the Meeker doctrine.
IT IS THEREFORE ORDERED at the ALJ's order dated May 10, 1999, is set aside insofar as it determined the claimant's average weekly wage. The matter is remanded with directions to redetermine the average weekly wage without regard to the value of veterinary services provided by the respondent employer.
INDUSTRIAL CLAIM APPEALS PANEL
________________________________ David Cain
_________________________________ Kathy E. Dean
Copies of this decision were mailed August 31, 1999 the following parties:
Pamela Vliek, 642 33-3/4 Rd., Clifton, CO 81520
Animal Medical Clinic, P.C., 504 Fruitvale Ct., Grand Junction, CO 81504-5768
Laurie A. Schoder, Esq., Colorado Compensation Insurance Authority — Interagency Mail (For Respondents)
Luke A. Brennan, Esq., 123 N. 7th St., #130, P.O. Box 579, Grand Junction, CO 81502 (For Claimant)
David Smith, Esq., 600 17th St., #1600N, Denver, CO 80202
BY: A. Pendroy