Summary
holding that SUB payments could not be used in determining a claimant's qualifying base year wages under sections 4, (b), ( l),, and (x) of the Law, 43 P.S. § 753, (b), ( l),, (x)
Summary of this case from Bucceri v. Workers' Comp. Appeal Bd.Opinion
Argued November 15, 1985
March 7, 1986.
Unemployment compensation — Wages — Unemployment Compensation Law, Act of December 5, 1936, P.L. (1937) 2897 — Supplemental unemployment compensation benefits — Due process — Equal protection — Base year earnings test.
1. In determining financial eligibility for benefits under the Unemployment Compensation Law, Act of December 5, 1936, P.L. (1937) 2897, wages to be included in the calculation include all remuneration paid by an employer with respect to employment, which is all personal service performed for remuneration. [502]
2. Supplemental unemployment benefits are paid on account of unemployment rather than in consideration for personal services rendered and thus are properly excluded from wage calculations in determining financial eligibility for unemployment compensation benefits. [503]
3. The use of a base year earnings test in the Unemployment Compensation Law, Act of December 5, 1936, P.L. (1937) 2897, bears a rational relationship to a legitimate government objective of assisting "employes" who are unemployed through no fault of their own, and therefore, since no fundamental interest or suspect classification is involved, substantive due process and equal protection constitutional standards are met by such statutory provisions. [505]
Argued November 15, 1985, before Judges MacPHAIL and COLINS, and Senior Judge BLATT, sitting as a panel of three.
Appeal, No. 2640 C.D. 1984, from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Gerald F. Whitling, No. 233529.
Application to the Office of Employment Security for unemployment compensation benefits. Benefits denied. Applicant appealed to the Unemployment Compensation Board of Review. Denial affirmed. Applicant appealed to the Commonwealth Court of Pennsylvania. Held: Affirmed.
Robert B. McGuiness, with him, James Bukac, for petitioner.
Donna M. Stanek, with her, Charles G. Hasson, Acting Chief Counsel, for respondent.
Gerald F. Whitling (petitioner) petitions for review of the order of the Unemployment Compensation Board of Review (Board) which affirmed a referee's decision ruling him financially ineligible to receive benefits, pursuant to Section 404 of the Unemployment Compensation Law (Act).
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P. S. § 804.
The facts in this case are not in dispute. The petitioner was last employed with Wade E. Simons (Simons), and that employment ended on October 1, 1983. He filed an Application for Benefits, effective April 29, 1984, thereby establishing the calendar year of 1983 as his base year. During his base year, he worked only for Simons, earning total base year wages of $5646.00, with high quarterly earnings of $3690.00. During that base year he had also received $331.84 in supplemental unemployment benefits (SUB pay) under a plan established by agreement between the Oilwell Division, United States Steel Corporation (Oilwell Division), a former employer, and the United Steelworkers of America (union).
The petitioner's separation from Simons is not an issue here.
Section 4(a) of the Act, 43 P. S. § 753(a), defines "base year" as "the first four of the last five completed calendar quarters immediately preceding the first day of an individual's benefit year." Section 4(b), 43 P. S. § 753(b), defines "benefit year" as "the fifty-two consecutive week period beginning with the day [an] 'Application for Benefits' is filed. . . ."
The administrative authorities ruled that the petitioner's SUB pay did not constitute wages under the Act and, therefore, could not be utilized in the determination of his financial eligibility. Without the SUB pay, however, the petitioner's total base year wages would be insufficient to establish financial eligibility.
See Section 404(e)(1) of the Act, 43 P. S. § 804(e)(1), the Table Specified for the Determination of Rate and Amount of Benefits, and the "step down" provisions of Section 404(a)(3), 43 P.S. Section 804(a)(3).
On review, the petitioner alleges that the Board erred legally in excluding SUB pay from his base year wages and, alternatively, that, if the Act is interpreted to so exclude SUB pay, his due process and equal protection rights have been thereby denied. We will address these questions in the order presented.
In reviewing the pertinent statutory language, we find that Section 4(x) of the Act defines "wages" as "all remuneration . . . paid by an employer to an individual with respect to his employment. . . ." Section 4(1)(1) of the Act defines "employment" as "all personal service performed for remuneration. . . ." And, although the Act does not define "remuneration," that term has been judicially defined to mean "payment for services performed." Gianfelice Unemployment Compensation Case, 396 Pa. 545, 555, 153 A.2d 906, 911 (1959), and Beistle Company v. Unemployment Compensation Board of Review, 73 Pa. Commw. 205, 207, 457 A.2d 1029, 1030 (1983).
43 P. S. § 753(x).
43 P. S. § 753(l)(1).
While the Appellate Courts of our Commonwealth have not previously faced the question presented here, we have considered analogous cases under the foregoing statutory provisions.
An employer's provision of salary-continuation payments made on account of a claimant's disability were held not to constitute wages under Section 4(x) in Karamanian v. Unemployment Compensation Board of Review, 46 Pa. Commw. 163, 405 A.2d 1364 (1979), because such payments were not made in consideration of personal service.
In McAnallen v. Unemployment Compensation Board of Review, 86 Pa. Commw. 77, 483 A.2d 1057 (1984), we held that sick and accident benefits paid to the claimant by the employer, and the claimant's National Guard pay, were not paid with respect to employment. Section 1002(8) of the Act expressly excludes the National Guard service from the definition of "employment", and we followed the Karamanian analysis with regard to the sick and accident benefits. We concluded, therefore, that funds from neither source could be utilized to qualify the claimant financially.
43 P. S. § 892(8).
Most recently, in Swackhammer v. Unemployment Compensation Board of Review, 86 Pa. Commw. 293, 484 A.2d 851 (1984), again relying on Karamanian, we held that workmen's compensation benefits, paid on account of the claimant's disability and not in consideration of personal services rendered, were not wages within the purview of the Act.
Although it is true that the petitioner's SUB pay was a benefit of his employment with Oilwell Division, the disallowed funds in Karamanian, McAnallen (excluding, of course, the National Guard pay) and Swackhammer also would not have been paid but for the existence of an employer-employee relationship. Consequently, we believe that, inasmuch as the petitioner's SUB pay was paid on account of his unemployment, such payments were, necessarily, not made in consideration for personal services.
Moreover, we do not believe that General Teamsters Union Local 249 v. Unemployment Compensation Board of Review, 74 Pa. Commw. 456, 459 A.2d 1363 (1983), is, as the petitioner contends, analogous here. General Teamsters involved payments made by the union to shop stewards to reimburse those union officials for wages lost when they were conducting union business during work hours. Those payments were held to constitute remuneration from the union to the shop stewards for services those individuals performed for the union.
We conclude, therefore, that the Board committed no legal error in excluding the petitioner's SUB pay from his base year wages.
Turning to the petitioner's due process and equal protection arguments, we note that the test for determining whether or not a challenged social or economic law deprives someone of substantive due process, and for evaluating an equal protection challenge, where, as here, no fundamental interest or a suspect classification is involved, is whether or not the legislation has a rational relationship to a valid state objective. See Latella v. Unemployment Compensation Board of Review, 74 Pa. Commw. 14, 459 A.2d 464 (1983), and Novack v. Unemployment Compensation Board of Review, 73 Pa. Commw. 148, 457 A.2d 610 (1983).
The petitioner has not specifically stated whether his alleged due process denial was substantive or procedural in nature, inasmuch as our review of his brief indicates that he alleges no procedural deprivation, we will address this argument as a substantive due process challenge.
Other than a superficial denial of any constitutional violations in its Summary of Argument section, the Board's brief does not respond to the petitioner's constitutional argument.
The petitioner has raised no such claims here.
Our Supreme Court has approved the Act's use of the base year earnings test to reflect a claimant's general attachment to the labor market as having a rational relationship to a legitimate governmental objective. Martin v. Unemployment Compensation Board of Review, 502 Pa. 282, 466 A.2d 107 (1983), cert. denied, 466 U.S. 952. We view the requirement that base year wages must arise from one's personal service to an employer within the base year as also having a clear relationship to the legitimate governmental objective of financially assisting "employees" unemployed through no fault of their own as provided in the Act's Declaration of Public Policy. We discern no constitutional violations, therefore, in excluding money not paid in consideration for personal services performed, such as the SUB pay here involved, from the calculation of the qualifying base year wages.
Section 3 of the Act, 43 P. S. § 752.
Accordingly, finding no errors of law or constitutional violations, we will affirm the Board's order.
ORDER
AND NOW, this 7th day of March, 1986, the order of the Unemployment Compensation Board of Review, Decision No. B-233529, is affirmed.