Opinion
W.C. No. 4-396-902
April 5, 2000
ORDER OF REMAND
The respondents seek review of an order of Administrative Law Judge Schulman (ALJ) insofar as it awarded temporary partial disability benefits, and included earnings from tips when calculating the claimant's average weekly wage. We set the order aside and remand for entry of a new order
The claimant was employed as a waitress by respondent Denny's when she sustained a compensable injury on July 27, 1998. At the time of the injury the claimant was concurrently employed by Safeway. The ALJ determined the claimant earned $473.97 per week at Safeway, and $325.60 per week at Denny's, for a total average weekly wage of $799.57. The ALJ specifically found that the claimant worked 35 hours per week at Denny's, and earned $2.16 per hour. The ALJ also credited the claimant's testimony that she received $250 per week in tips
The respondents disputed the propriety of including the tips in the average weekly wage to the extent that tips had not been reported to the Internal Revenue Service (IRS). However, the ALJ credited the claimant's testimony that she worked the "night shift" and, therefore, the claimant was frequently deprived of the opportunity to report her tips to Denny's manager. Instead, the ALJ found that Denny's management either estimated the claimant's tips, or simply recorded that no tips were received. Further, the ALJ credited the claimant's testimony that she intended to report her tips when she filed her 1998 income tax return. Thus, the ALJ awarded certain periods of temporary partial disability benefits based on an average weekly wage of $799.57
On review, the respondents contend that the ALJ erroneously calculated the claimant's average weekly wage based on the claimant's testimony that she earned $250 per week in tips. The respondents argue that, under § 8-40-201(19)(b), C.R.S. 1999, the average weekly wage may not include tips which were not reported to the IRS. We agree and remand the matter for recalculation of the average weekly wage and temporary partial disability benefits § 8-40-201(19)(b) provides that the term "wages" shall include "gratuities reported to the federal internal revenue service by or for the worker for purposes of filing federal income tax returns." The statute goes on to provide that wages "shall not include any similar advantage or fringe benefit not specifically enumerated in this subsection (19)."
In interpreting this statute, the primary objective is to effect the legislative intent. The legislative intent is best evidenced by the words of the statute itself. Therefore, we should give the words in the statute their plain and ordinary meanings unless the result is absurd. Snyder Oil Co. v. Embree, 862 P.2d 259 (Colo. 1993). If the statute contains any ambiguity, we may resort to the rules of statutory construction. Thus, it is proper to consider the state of the law prior to the legislative enactment, and the problem the statute was designed to solve Henderson v. RSI, Inc., 824 P.2d 91 (Colo.App. 1991). Further, when the General Assembly amends a statute, it is presumed the legislature intends to change the law. Arenas v. Industrial Claim Appeals Office, ___ P.2d ___ (Colo.App. No. 99CA1067, March 16, 2000). It is also true that a statute should be construed in the context of the entire statutory scheme so as to give consistent, harmonious, and sensible effect to all of its parts. Henderson v RSI Inc., supra. Finally, the rules of statutory construction assume the General Assembly intended a just and reasonable result Weld County School District RE-12 v. Bymer, 955 P.2d 550 (Colo 1998)
In our view, § 8-40-201(19)(b) contains no ambiguity. The plain and ordinary meaning of this statute is that gratuities which the claimant receives in the course of employment may be considered in calculating the average weekly wage, but only if those gratuities were reported to the IRS by the claimant, or by some other party (such as the employer) on behalf of the claimant This reading of the statute produces no absurdity because it permits inclusion of tips in the claimant's average weekly wage, but also discourages fraud by requiring documentary evidence tending to corroborate the claimant's testimony concerning the amount of tips received. See Dawes v. Colorado Cabana, Inc., W.C No. 4-283-730 (August 11, 1997), aff'd., Dawes v. Industrial Claim Appeals Office, (Colo.App. No. 97CA1418, March 5, 1998) (not selected for publication)
However, even if this statute were ambiguous, we would not reach a different result. The current version of § 8-40-201(19)(b) was enacted in 1991. 1991 Colo. Sess. Laws, ch. 219 at 1293-1294 Prior to the 1991 amendment, the statute provided that the term "wages" shall include "reportable tips." Thus, the previous statute did not concern itself with whether tips had actually been reported to the IRS, but required only that the tips be subject to reporting. See Newman v. Village Inn, W.C. No. 3-829-809 (June 19, 1992). As we have previously held, the apparent purpose of the 1991 amendment was to change the law and "restrain claimants who might be inclined to exaggerate their testimony concerning" the amount of tips received by "providing an outside limit to such testimony as measured by the amount of tips reported to the IRS." Dawes v. Colorado Cabana, Inc., supra. Presumably, the General Assembly reasoned that, because tips often involve cash transactions in which the employer is not directly involved, a more stringent standard of proof is necessary than would be true for other types of "wages."
Here, the ALJ excused the claimant from the statutory requirement of proving that her tips were reported to the IRS based on the finding that it was difficult for the claimant to report her tips to the employer, and because the employer sometimes "estimated" the claimant's tips. Initially, we note that the statute does not provide for any exceptions Consequently, neither we nor the ALJ may legislate any exceptions Kraus v. Artcraft Sign Co., 710 P.2d 480 (Colo. 1985). In any event, the statute states that tips may be reported by the claimant, or on behalf of the claimant by some other party Therefore, we do not understand the statute as placing the entire burden of reporting on the employer, or excusing the claimant's failure to report tips if the employer has not fulfilled its responsibilities
Here, the claimant testified that she was aware of the employer's procedure for recording and reporting tips. Despite the apparent deficiency of this process, there is no evidence the claimant attempted to rectify the reporting procedure, nor did she directly report her tips to the IRS. In fact, the claimant conceded that in 1996 and 1997 she did not file any income tax returns. (Tr. p. 41). Moreover, the hearing in this matter occurred on February 23, 1999. Despite this fact, the claimant had not yet filed a 1998 income tax return in which she could have reported tips from 1998. Because the claimant stands to gain if tips are included in the average weekly wage, and also stands to gain if tips are not reported to the IRS, we do not view our conclusion as producing an unfair or absurd result
Neither does the fact that the claimant "intended" to report her tips when she filed her 1998 tax return warrant a different result. Here, the statute expressly requires that the tips must have been "reported" to the IRS if they are to be included in the average weekly wage. The statute is worded in the past tense Therefore, the claimant's "intentions" were irrelevant. In this regard, we note that § 2-4-104, C.R.S. 1999, concerning statutory construction, provides that "words in the present tense include the future tense." See Gonzales v. District Court, 638 P.2d 39 (Colo. 1982). Because the General Assembly used the past tense of the word "report," we infer the statute requires that the act of reporting tips must have been completed prior to the time the average weekly wage is calculated
Similarly, we reject the claimant's assertion that this interpretation of the statute conflicts with § 8-42-102(3), C.R.S 1999, which affords the ALJ discretion to calculate a fair average weekly wage in light of the circumstances. In our view, § 8-40-201(19)(b) contains an express prohibition on the type of "gratuities" which the ALJ may include when calculating a "fair" average weekly wage. Since unreported tips are not a type of "advantage" specifically listed in § 8-40-201(19)(b), they are necessarily excluded from consideration. Cf. City of Lamar v Koehn, 968 P.2d 164 (Colo.App. 1998). Moreover, because § 8-40-201(19)(b) is a specific provision governing gratuities, it must prevail over the general considerations found in § 8-42-102(3). Climax Molybdenum v. Walter, 812 P.2d 1168 (Colo 1991) (specific statutory provisions usually prevail over general provisions)
Under these circumstances, the ALJ's determination of the claimant's average weekly wage must be set aside. The matter is remanded with directions to redetermine the claimant's average weekly wage, considering only those tips which were reported to the IRS in accordance with the requirements of § 8-40-201(19)(b) Further, the claimant's entitlement to temporary partial disability benefits shall be recalculated based on the ALJ's determination of the claimant's average weekly wage
IT IS THEREFORE ORDERED that the ALJ's order dated May 6, 1999, is set aside insofar as it determined the claimant's average weekly wage and awarded temporary partial disability benefits The matter is remanded for entry of a new order consistent with the views expressed herein
INDUSTRIAL CLAIM APPEALS PANEL
________________________________ David Cain
________________________________ Robert M. Socolofsky
Copies of this decision were mailed April 5, 2000 to the following parties:
Jamie Brimmerman, 1600 Sable Blvd., #35, Aurora, CO 80011
Denny's, 6699 Leetsdale Dr., Denver, CO 80224-1520
CNA Risk Management/RSK Co., P. O. Box 27537, Houston, TX 77227
Greg S. Russi, Esq., 201 8th St., P. O. Box 1089, Glenwood Springs, CO 81602 (For Claimant)
Janice M. Greening, Esq., 950 17th St., #2100, Denver, CO 80202-2804 (For Respondents)
BY: A. Pendroy