Opinion
Board No. 7345-89
Filed: July 31, 1995
REVIEWING BOARD:
Judges Kirby, Maze-Rothstein, and Smith.
APPEARANCES:
Thomas J. Roccio, Esq., at hearing and on appeal, and Carol A. Rolf, Esq., on appeal, for the employee.
Robert Barry, Esq., for the insurer.
The employee appeals from the decision of an administrative judge regarding his average weekly wage. He contends that the judge erred in excluding the value of his company vehicle and in including wages from weeks of only partial work. Because the judge based her decision on a factual premise wholly unsupported by the record, we vacate the average weekly wage decision. In so doing, we hold that, under the alleged circumstances of this case where use of the company car was an express wage substitute, its agreed upon value was "earnings of the injured employee" and therefore part of his "average weekly wages" under workers' compensation law.
James Roberts received two personal injuries arising out of and in the course of his employment as a sheet metal mechanic for Central Heating and Cooling. The first injury occurred in January 1989 and rendered him incapacitated for a week. The day he returned to work, February 6, 1989, he fell fourteen feet from a ladder sustaining serious injuries. (Dec. 4.) American Mutual, the insurer, accepted Roberts' claim and commenced compensation payments at the rate of $444.20 per week. In February, 1991, it commenced the pending action for reduction, suspension or discontinuance of compensation. At conference the administrative judge ordered a reduction of compensation to $298.67 per week based on an average weekly wage of $698 and an earning capacity of $250. The insurer appealed the conference order, disputing both the extent of incapacity and the average weekly wage.
After hearing de novo, the administrative judge decided that Roberts's average weekly wage was only $593.43. She excluded from the wage calculation $2 per hour alleged to be the value of a company vehicle provided to him in lieu of wages. The judge's rationale was as follows:
. . . At hearing the Employee offered proof of wages via W-2 statements from 1988 and 1989 and an employer wage statement.
At issue is the Employee's entitlement to have an extra $2 per hour included in the computation of his average weekly wage. On cross-examination the Employee testified that he was told a company vehicle would be given to him in lieu of an additional wage of $2 per hour. The vehicle was assigned to him because he was experiencing difficulties with his personal automobile and he needed a mode of transportation for commuting to jobs between Natick and Dorchester. The Employee was not allowed to use the vehicle for personal use. The Employee, failed to produce any documentation to support his position that use of the vehicle was accepted in lieu of wages, i.e., a declaration on his income tax statement.
(Dec. 8.) (emphasis supplied)
The judge calculated the average weekly wage based upon Roberts's earnings at Central Cooling and Heating Inc. Roberts worked there less than fifty-two weeks prior to his February 6, 1989 injury. The judge computed the average weekly wage by dividing the total amount which Roberts earned from Central Cooling and Heating Inc. by the number of weeks which he had worked, omitting the first and last weeks of work. (Dec. 9.)
452 Code Mass. Regs. 1.08 (5) requires the insurer to provide the employee with a wage schedule upon which weekly benefits are being paid before a complaint for discontinuance can be forwarded from conciliation to adjudication. The wage schedule was admitted as Employee's Exhibit 5.
He began for this employer the prior September. He had had at least eleven years of prior work experience as a sheetmetal mechanic. (Dec. 4.)
On appeal, Roberts challenges both the amount of wages found and the method of calculation. We find no error in the method of calculation but agree that the factual finding on the amount of his average weekly wage is flawed as it is based on a misperception of the evidence.
Contrary to the judge's finding of no corroborating evidence (Dec. 8), Roberts did produce as an exhibit a document which supports his testimony that he was given a company vehicle to use for commuting in lieu of a two dollar per hour raise. Employee exhibit 2, a copy of the employer's first report of injury, contains the following handwritten note in the "for office use only" column: "Recd Co. vehicle considered $2 an hour to employer. Can we reimb. as wages he recd this in lieu of raise." The insurer did not object to the admission of this exhibit and therefore the handwritten statement constituted evidence which was entitled to be weighed. Haywood v. Town of Wellesley, 4 Mass. Workers' Comp. Rep. 234, 236 (1990). The fact that the employee did not declare this value as income on his tax return does not make the evidence inadmissible but merely goes to the weight which the judge may wish to accord it.
Because the average weekly wage decision is based on a finding unsupported by the record, we vacate it. See Bonneau v. Acme Automotive Center, 7 Mass. Workers' Comp. Rep. 207, 208 (1993).
The amount of an employee's average weekly wage is a question of fact for the administrative judge. As with all facts necessary to prove a claim entitling an employee to compensation, the burden of proving average weekly wage rests with the employee. See More's Case, 3 Mass. App. Ct. 715 (1975); Wheeler v. Jean Alden Stores, Inc., 6 Mass. Workers' Comp. Rep. 226 (1992). The other evidence regarding the amount of employee's wages did not include this additional $2 per hour amount. We therefore find that the evidence about the $2 additional wage is conflicting. Vacation of the erroneous "no evidence" finding and remand for a factual finding on whether the company car was an express wage substitute is the appropriate remedy, unless the judge's error did not affect the employee's substantial rights.
Employee Ex. 3 was a 1988 W-2 Wage and Tax Statement. Employee Ex. 4 was a 1989 W-2 Wage and Tax Statement. Employee Ex. 5 was the wage statement from September 21, 1988 to February 8, 1989.
The judge's erroneous "no evidence" finding would be harmless error if the value of a company car could not be included in the calculation of average weekly wages. We therefore address that issue.
We do not have the benefit of any jurisprudence in the Commonwealth on this precise issue. However, the statutory language and its history lead us to the conclusion that, unlike employer-paid health insurance benefits, under the alleged circumstances of this case, the value of the company car should be considered in calculating the employee's average weekly wage. Three statutes are implicated in the average weekly wage analysis, and none of them contain language which would prohibit this conclusion. Compare Barofsky's Case, 411 Mass. 379, 380, 582 N.E.2d 538 (1991) (employer-paid health insurance excluded).
General Laws c. 152, § 1(1), defines "the earnings of the injured employee." It was amended by § 13 of c. 398 of the Acts of 1991 by adding the following paragraph:
The first paragraph of § 1(1) defines the "average weekly wage" in pertinent part as follows:
The earnings of the injured employee during the period of twelve calendar months immediately preceding the date of injury, divided by fifty-two; but if the injured employee lost more than two weeks' time during such period, the earnings for the remainder of such twelve calendar months shall be divided by the number of weeks remaining after the time so lost has been deducted. . . . Weeks in which the employee received less than five dollars in wages shall be considered time lost and shall be excluded in determining the average weekly wages. . . .
Except as provided by sections twenty-six and twenty-seven of chapter one hundred forty-nine, such fringe benefits as health insurance plans, pensions, day care, or education and training programs provided by employers shall not be included in employee earnings for the purpose of calculating average weekly wages under this section.
The amendment was deemed procedural by § 107 of c. 398. Because of the reasoning below, we do not have to reach the issue of its application to this case which was filed prior to the amendment but reached hearing after the amendment's effective date. Compare Connolly v. Wire and Metal Separation Sys., 6 Mass. Workers' Comp. Rep. 241 (1992), reversed sub nom. as Connolly's Case, 418 Mass. 848, 851 (1994) with Sutcliffe v. Brayman Automotive, consolidated by the reviewing board with Lanoue v. Fernandes Supermarket and Vivace v. Acme Concrete Corp., 7 Mass. Workers' Comp. Rep. 298 (1993), consolidated on appeal with Shelby Mut. Ins. Co. v. Commonwealth, 36 Mass. App. Ct. 317 (1994), reversed sub nom. as Shelby, 420 Mass. 251 (1995).
By § 1(9) of the Workers' Compensation Act, the Legislature linked the determination of average weekly wage to the Unemployment Compensation Act. Section 1(9) fixes the maximum compensation benefit an employee can receive, regardless of how high his earnings are, at the average weekly wage in the Commonwealth in effect on the date of injury. See G.L.c. 152, §§ 31, 34, 35, 34A. As did the Barofsky court, we look to the definition of wages set forth in the Unemployment Compensation Act, G.L.c. 151A, referred to by G.L.c. 152, § 1(9).
Section 1(9) provides:
(9) "Average weekly wage in the commonwealth," for dates subsequent to October fourth, nineteen hundred and seventy, the average weekly wage as determined according to the provisions of subsection (a) of section twenty-nine of chapter one hundred and fifty-one A and promulgated by the director of the division of employment security, on or before October first of each year. For dates prior to October fourth, nineteen hundred and seventy, the state average weekly wage for all employees covered under the employment security law as calculated by said director of the division of employment security during the year of such date.
St. 1985, c. 572, § 13, by § 68 made effective January 1, 1986.
Section 1(s) of the Massachusetts Unemployment Compensation Act defines an individual's wages as: "every form of remuneration of an employee . . ., whether paid directly or indirectly, including salaries, commissions and bonuses, and reasonable cash value of board, rent, housing, lodging, payment in kind and all remuneration paid in any medium other than cash," with some exceptions not applicable here.
Allegedly this employer, instead of paying a $2 per hour pay raise provided Roberts with a company car. This allegation has some support in the record. If it is true, the provision of the company car falls directly within the phrase "remuneration paid in a medium other than cash" and should be characterized as a wage payment rather than a fringe benefit. (Tr. 31-34.) This interpretation is consistent with cases holding that computation of an employee's average weekly wage should include the value of tips, Powers' Case, 275 Mass. 515 (1931), commissions, Perkins' Case, 278 Mass. 294 (1932) and room and board, Palomba's Case, 9 Mass. App. Ct. 809, 881 (1980). Compare Barofsky's Case, 411 Mass. 379 (1991), where the record did not suggest that Barofsky would have been paid at a higher rate if his employer did not pay his health insurance premium. Also compare the reasoning of the reviewing board in Barofsky v. Lundermac Co., Inc., 4 Mass. Workers' Comp. Rep. 145 (1990) (penumbra of fringe benefits includes group life, health and disability insurance plans, employer-provided child day care, tuition reimbursement plans, clothing allowances and the proverbial "company car").
In Radke v. Eastham Foundations, 7 Mass. Workers' Comp. Rep. 197, 202, n. 3 (1993), the reviewing board indicated that disability plans fell under § 1(1)'s fringe benefit exclusion. In Froment v. Kerten's Jewelers, 5 Mass. Workers' Comp. Rep. 268, 270 (1991), the reviewing board found that employer paid parking was a fringe benefit.
If the provision of the company car in this case was explicitly in lieu of an wage increase, it cannot be construed as a fringe benefit. On remand, the judge shall determine if the employee's testimony is true. If so, the judge shall consider the $2 per hour as "earnings of the employee" and include it as part of Roberts's "average weekly wage" under workers' compensation law. G.L.c. 151A, §§ 1(n), 29(a); c. 152, §§ 1 et seq., 1(1, 9).
In conclusion, we vacate the average weekly wage finding in the decision and remand for a new decision on that issue consistent with the above discussion. Since the hearing judge no longer serves in the department, we remand the case to the senior judge for reassignment to a different administrative judge for hearing de novo on that issue. We suggest that in the interest of judicial economy and efficiency the parties stipulate to the admission of employee exhibits 2-5 admitted by the former judge. The employee's testimony on this issue will have to be re-taken as its credibility is in dispute. Antoine v. Pyrotector, 7 Mass. Workers' Comp. Rep. 337, 342 (1993). In all other respects the decision is affirmed.
So ordered.