Opinion
W.C. No. 4-238-978
January 23, 1998
FINAL ORDER
The respondents seek review of a final order of Administrative Law Judge Henk (ALJ) which included in the claimant's average weekly wage the value of the claimant's vacation and sick leave, as well as the employer's contribution to the claimant's pension plan. We modify the order, and as modified, affirm it.
In addition to his wages, the ALJ found that the claimant earned vacation leave at the rate of 4.93 hours per week. Based on the claimant's hourly wage, the ALJ determined that the "value" of the vacation time was $18.73 per week.
The ALJ also found that the claimant could accumulate up to twenty days (160 hours) of vacation leave, and carry it over to "subsequent years." However, accrued vacation leave in excess of twenty days would be forfeited. Upon termination, the claimant would be paid for accrued vacation leave up to twenty days, plus additional vacation leave accrued in the current calendar year. It is undisputed that the claimant did not forfeit any vacation leave under this policy.
In addition, the claimant accumulated sick leave at the rate of 1.54 hours per week, which the ALJ valued at $11.70 per week. The claimant could accumulate up to ninety days or 720 hours sick leave which could be carried over from year to year. Accrued sick leave in excess of 720 hours would be forfeited. Upon termination, the claimant would receive payment for up to 240 hours, or thirty days sick leave. (The ALJ erroneously stated the claimant could receive payment for up to ninety days of sick leave. See Stipulation, paragraph 9). The ALJ also found that the claimant would receive compensation for sick leave accrued in the current calendar year, but we are unable to locate the basis of this finding. (See Stipulation, paragraph 9).
Finally, the employer contributed $26.43 per week to the claimant's pension. The ALJ found that the claimant is fully vested in the plan, although he may not receive benefits until age 60, or upon his death.
Under these circumstances, the ALJ held that the weekly value of the claimant's vacation and sick leave should be included in the claimant's average weekly wage. Relying on Meeker v. Provenant Health Partners, 929 P.2d 26 (Colo.App. 1996), the ALJ concluded that the vacation and sick leave had a reasonable, present-day, cash equivalent value, and that the claimant had a reasonable expectation of receiving the benefits under appropriate reasonable circumstances. In support, the ALJ stated that the vacation and sick leave constituted a "significant component" of the claimant's compensation package, and noted that the claimant never actually forfeited any of these benefits.
The ALJ also held that the value of the employer's weekly contribution to the pension plan should be included in the average weekly wage. In support, the ALJ stated that the claimant was "fully vested" in the plan, and had an expectation in receiving the benefit on the occurrence of the appropriate circumstances.
I.
The respondents initially contend that the ALJ's reliance on Meeker v. Provenant Health Partners, supra, was erroneous. The respondents argue that Meeker was wrongly decided because it relies on Russell v. Colorado Division of Employment, 786 P.2d 483 (Colo.App. 1989). The respondents reason that Meeker's reliance on Russell was improper because Russell was decided prior to the 1989 amendments pertaining to the inclusion of fringe benefits in the average weekly wage. See 1989 Colo. Sess. Laws, ch. 67 at 411.
Although the respondents' argument is not without merit, Meeker v. Provenant Health Partners is a published decision of the court of appeals. Consequently, we are bound by the court's opinion. C.A.R. 35(f).
II.
The respondents next contend that, even if Meeker is applicable, the ALJ erred in including the value of the claimant's vacation and sick leave in his average weekly wage. The respondents argue that, unlike the situation in Meeker, the claimant's vacation and sick leave had no reasonable, present-day, cash equivalent value because it was subject to partial forfeiture, and contingent on the claimant's mode of usage. We agree with the respondents' argument.
Under § 8-40-201(19)(b), C.R.S. 1997, the General Assembly defined the term "wages" to include specified fringe benefits. However, the statute also states that the term "wages" does not "include any similar advantage or fringe benefit not specifically enumerated" in the statute. Thus, unenumerated fringe benefits may not be considered part of a claimant's average weekly wage. See Aspen Highlands Skiing Corp. v. Apostolou, 854 P.2d 1357, 1361(Colo.App. 1992), aff'd. 866 P.2d 1384 (Colo. 1994).
However, in Meeker v. Provenant Health Partners, supra, the court of appeals held that some forms of non-cash or deferred compensation benefits 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 8-40-201(19)(a), C.R.S. 1997. Consequently, these non-cash or deferred compensation benefits must be considered "wages" for purposes of calculating the average weekly wage.
In reaching this conclusion, the Meeker court cited Russell v. Colorado Division of Employment, supra, for the proposition that an employer-paid benefit constitutes "wages" if it has a "reasonable, present-day, cash equivalent value," and the employee has access to the benefit on a "reasonable day-to-day basis," or has "an immediate expectation interest in receiving the benefit under appropriate, reasonable circumstances." In Meeker, the court concluded that personal employee time (PET) constituted part of the claimant's "wages" because it was never "forfeited" by the employee, and because the employee would receive the "current value" of the PET either by taking a day of paid leave, or by being paid in cash for accrued PET upon termination from employment.
Here, we agree with the respondents that the claimant's vacation leave does not have a reasonable, present-day, cash value sufficient to treat it as "wages." Although it is true that the claimant may use all vacation leave in a given year, the employer caps the amount of vacation leave which may be accumulated from year to year. Thus, the "value" of the claimant's vacation leave is dependent on the actual usage of the vacation, and will decline if the claimant fails to use the leave in accordance with the cap established by the employer.
Moreover, unlike the situation in Meeker, the forfeiture provision may preclude an employee from redeeming the full value of accumulated vacation leave at termination. Thus, we conclude the vacation leave is not a cash equivalent, as was the case with PET in Meeker.
For many of the same reasons, we conclude that the claimant's sick leave has no reasonable, present-day, cash equivalent value. Moreover, in the case of sick leave, the claimant's usage is dictated by the requirement that he actually be sick or disabled. Thus, the sick leave may never accrue to the claimant (beyond 30 days), and does not have the same liquidity as PET in Meeker. Cf. Koehler v. King Soopers, W.C. No. 3-927-541 (December 14, 1990) (decided under prior law, but holding vacation and sick leave not includable in the average weekly wage under the Russell test).
III.
The respondents next contend that the ALJ erred in including the value of the employer's contribution to the pension plan in the claimant's average weekly wage. We disagree.
In our view, the ALJ correctly determined that the pension contribution has a reasonable, present-day, cash value. The claimant's interest in the employer's contribution is fully vested and may be reduced to present-day cash value. Since the claimant's right to the pension contribution may not be divested, he has an "immediate expectation" of receiving it under appropriate, reasonable circumstances (retirement or death). See Vigil v. Pueblo West Metropolitan District, W.C. No. 3-533-626 (April 9, 1991) (decided under prior law, but holding vested pension contributions includable in average weekly wage under Russell test); Walters v. State Home and Training School, W.C. No. 3-651-600 (November 13, 1989) (decided under prior law, but holding vested PERA contribution includable under Russell test).
IT IS THEREFORE ORDERED that the ALJ's order dated July 5, 1997, is modified to provide that the value of the claimant's vacation and sick leave is not included in the average weekly wage.
IT IS FURTHER ORDERED that the ALJ's order is otherwise affirmed.
INDUSTRIAL CLAIM APPEALS PANEL ________________________________ David Cain ________________________________ Bill WhitacreNOTICE
This Order is final unless an action to modify or vacate the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date the Order was mailed, pursuant to §§ 8-43-301(10) and 307, C. R. S. 1997.
Copies of this decision were mailed January 23, 1998 to the following parties:
Gary L. Koehn, 403 North 7th, Lamar, CO 81052
Housing Authority of the City of Lamar, 206 E. Cedar St., Lamar, CO 81052-3404
Colorado Compensation Insurance Authority, Attn: Brandee DeFalco-Galvin, Esq. (Interagency Mail)
Michael W. Seckar, Esq., 402 W. 12th St., Pueblo, CO 81003 (For the Claimant)
Ella J. Martinez, Esq., 1700 Broadway, Ste. 1700, Denver, CO 80290-1701 (For the Respondents)
By: ________________________________