Opinion
W.C. No. 4-251-934
May 22, 1997
FINAL ORDER
The claimant seeks review of a final order of Administrative Law Judge Martinez (ALJ), which denied her request to have payouts from the employer's "profit sharing" plan included in the calculation of her average weekly wage. We affirm.
The claimant sustained an injury on April 20, 1995. At that time, the claimant earned a regular hourly wage and had the benefit of medical insurance. It is undisputed that the hourly wage and value of the medical insurance are includable in the average weekly wage.
The respondent also provided a profit sharing program for which the claimant was eligible. Under this plan, the employer would set quarterly and yearly profit goals for the company. Employees were eligible for profit sharing depending on the extent to which the company met its goal during the applicable quarter or year.
At the time of the claimant's injury, employees were entitled to eighty hours of pay if the company met one hundred percent of the goal. If the company met less than one hundred percent of its goal, the employee was entitled to profit sharing based upon the percentage of the goal met multiplied by eighty hours of pay.
The parties stipulated that, in order to be eligible for profit sharing, an employee had to be working on the last day of the applicable profit sharing period. Further, the respondent reserved the right to discontinue the profit sharing plan after thirty days notice.
The parties also stipulated that the claimant worked for the respondent from August 15, 1994 through May 17, 1996. She received profit sharing for all applicable periods, for a total of $2,916.15. However, there was also evidence that for some quarters (during which the claimant did not work) the employer failed to make a profit and no profit sharing benefits were paid to the employees.
Under these circumstances, the ALJ declined to include profit sharing in calculating the claimant's average weekly wage. The ALJ concluded that, based upon his consideration of the evidence, the profit sharing plan constituted a "fringe benefit" not specifically enumerated in § 8-40-201(19)(b), C.R.S. (1996 Cum. Supp.).
On review, the claimant contends that the ALJ erred in failing to include the profit sharing plan in the average weekly wage. Relying primarily on Simmonds v. Eastman Kodak, 781 P.2d 140 (Colo.App. 1989), the claimant argues that the profit sharing plan constituted "wages" because it involved a cash payment from which taxes were withheld. We are not persuaded.
Section 8-40-201(19)(a), C.R.S. (1996 Cum. Supp.), defines wages as the "money rate at which the services rendered are recompensed under the contract for hire in force at the time of the injury." Section 8-40-201(19)(b) provides that the term "wages" shall also include the value of certain fringe benefits including health insurance, and the reasonable value of board, rent, housing, and lodging. However, subparagraph (b) also states that the term wages "shall not include any similar advantage or fringe benefit not specifically enumerated in this subsection (19)."
In Meeker v. Provenant Health Partners, 929 P.2d 26 (Colo.App. 1996), the Court of Appeals established a test for determining whether an employer-paid benefit constitutes "wages" or an unenumerated "similar advantage or fringe benefit." Relying on Russell v. Colorado Division of Employment, 786 P.2d 483 (Colo.App. 1989), the Meeker court held 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), which the employer credited to employees, constituted "wages." The PET time was credited to the claimant at the rate of 9.5 hours for each 80 hours of work. The claimant was then free to be absent from work for 9.5 hours and be paid at the rate of her hourly wage. Further, if the claimant ceased employment prior to using the accumulated PET time, the employer would redeem the PET time at the claimant's regular hourly wage. Under these circumstances, the court concluded that PET had a "current cash equivalent value," and the claimant had access to the PET time on a day-to-day basis.
Applying the Meeker test to the facts in this case, we cannot conclude that the profit sharing plan constituted "wages" for purposes of § 8-40-201(19)(a). First, on any given day during the applicable quarter, the profit sharing plan had no reasonable "present-day cash equivalent value." For instance, on the day of the claimant's injury her right to profit sharing for the second quarter of 1995 was entirely contingent on the respondent achieving a profit as measured at the end of the quarter. Further, the claimant's right to profit sharing was dependent on her remaining employed on the last day of the quarter. Thus, we do not view the claimant's right to receive profit sharing as having any present economic value to the claimant or anyone else.
Moreover, the claimant did not have access to the benefit of the plan profit sharing plan on a day-to-day basis, nor did she have "an immediate expectation interest in receiving the benefit." Again, profit sharing was contingent upon the overall profitability of the company, and the claimant had no "immediate expectation interest" in the respondent's profitability. Neither did the claimant have a right to "cash out" her inchoate profit sharing rights.
We are not persuaded by the claimant's reliance on Simmonds v. Eastman Kodak Co., supra. In that case, the claimant was seeking benefits based on a 1985 injury, and the Court of Appeals held that the employer's yearly bonus program was properly included in the claimant's average weekly wage. Significantly, Simmonds was decided prior to Meeker and Russell v. Colorado Division of Employment. Thus, the Simmonds court was not operating under the exacting test established by Meeker and Russell. Moreover, the real issue in Simmonds was whether the employer's bonus plan constituted a "gratuity," which was excludable from claimant's average weekly wage under the statute applicable to the 1985 injury. The court held that the bonus could not logically be construed as a "gratuity" because it was given as compensation for work performed and was subject to income taxes. Thus, the court's statement that the bonus constituted "an alternative form of payment of wages" appears to be dictum.
Finally, the Simmonds case was decided under the law as it existed prior to the enactment of the current version of § 8-40-201(19)(b), which excludes unenumerated fringe benefits from inclusion in the definition of wages. In our view, the purpose of enacting the current version of the statute was to reduce the type and number of employer paid benefits which will be includable in the average weekly wage. Therefore, we hold that the ALJ's decision is consistent with the current state of the law.
IT IS THEREFORE ORDERED that the ALJ's order dated January 6, 1997, is 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. (1996 Cum. Supp.).
Copies of this decision were mailed May 22, 1997 to the following parties:
Tonya Cleah Orrell, 2332 Monument Road, Grand Junction, CO 81503
Coors Porcelain, Attn: Janet Comerford Francie Switzer, 2449 River Road, Grand Junction, CO 81505
Sedgwick James of Colorado, P.O. Box 101268, Denver, CO 80250-1268
Betty Bechtel, Esq., 744 Horizon Ct., Ste. 300, Grand Junction, CO 81506 (For the Respondent)
J. Keith Killian, Esq., P.O. Box 4848, Grand Junction, CO 81502 (For the Claimant)
By: ____________________________