96 Wash. App. 69 | Wash. Ct. App. | 1999
The question in this appeal is whether the Department of Labor and Industries must include the reasonable value of employer-furnished health insurance
In 1993, Dianne L. Cockle worked full time for the Pierce County Rural Library District. The District paid her $5.61 per hour. It also furnished her with health insurance, for which it paid premiums of $205.52 per month.
After her injury, Cockle sought time-loss compensation based on her monetary pay and the value of her health insurance. The Department made an award based on monetary pay only.
Cockle appealed to the Board of Industrial Insurance Appeals, which affirmed. She then appealed to the superior court, which ruled:
Plaintiff’s health and dental insurance premiums were “wages” because they were compensation which had a monetary value, which she received over and above the hourly wages paid directly to her. During periods of disability the employer stopped paying these premiums for her, so she lost monthly compensation which would have been provided for her had she been working. Such premiums are a form of compensation which should be included in wages under RCW 51.08.178. See that statute, and Rose v. Department of Labor and Industries, 57 Wn. App. 751, 790 P.2d 201, review denied, 115 Wn.2d 1010 (1990).[4 ]
The superior court reversed, and the Department filed this appeal.
Washington’s Industrial Insurance Act grants time-loss compensation to a worker who is temporarily disabled due to an industrial injury.
Enacted in 1971,
It is not hard to discern why the legislature provided that items in the first category shall count as “wages.” Board means food. Housing means shelter. Fuel means heat or warmth. Each is a necessity of life, without which the injured worker cannot survive a period of even temporary disability. Before the worker’s injury, each was an item that the employer was supplying in kind. After the worker’s injury, each is an item that the worker must replace during the period of his or her disability. Thus, each is an item that the worker must replace out of time-loss compensation, and each is an item that should be included in the basis from which time-loss compensation is computed.
It is not hard to discern why the legislature provided that items in the second category shall count as “wages.”
It is not hard to discern why the legislature provided that items in the third category term shall not count as “wages.” An employer may supply to a worker, in kind, items of consideration that the worker can do without while disabled, and restore or replenish after returning to work. Arguably, examples include pension benefits and vacation pay.
The legislature’s handling of all three categories is consistent with logic and common sense. The “ultimate goal” of time-loss compensation “is to provide temporary financial support until the injured worker is able to return to work.”
In reaching this result, we reject Cockle’s reliance on Rose v. Department of Labor and Industries.
We also reject Cockle’s argument that all forms of consideration must necessarily be included within the basis from which time-loss compensation is computed. She claims (1) that the purpose of time-loss compensation is to replace the “earning capacity” that the injured worker would have had during the period of disability but for the industrial injury;
In reaching our result, we also reject various arguments advanced by the Department. The Department claims that health insurance is not “of like nature” to board, housing and fuel because the typical worker may not use it, or at least is likely to use it less frequently than board, housing
The Department contends that it should not have to value health insurance because the reasonable value of health insurance is harder to ascértain than the reasonable value of board, housing and fuel.
In another argument pertaining to value, the Department asserts that health insurance is not “of like nature” to board, housing and fuel because health insurance is intangible and board, housing and fuel are tangible. Without more, this distinction is immaterial.
In a final argument pertaining to value, the Department asserts that health insurance is not “of like nature” to board, housing and fuel because health insurance must be valued by “experts,” while board, housing and fuel can be valued by lay people. We disagree. An “expert” is merely someone with specialized training in a narrow area, and there is no reason to believe the Department cannot provide one or more of its in-house employees with the training
The Department argues that the calculation of time-loss compensation is meant to be “administratively simple”;
The Department claims that if health insurance is included within “wages,” there will be “a flood of litigation” involving other employer-supplied items.
The Department argues that health insurance should not be included within “wages” because, if the employer continues the worker’s health insurance during the worker’s period of disability, the worker will recover twice (once by having the insurance, and again by having the value of the insurance included in the basis for time-loss compensation). The facts here do not require that we address this argument, for the library did not continue Cockle’s insurance during the period of her disability. We comment, however, that time-loss compensation is meant “to reflect . . . lost earning capacity,”
The Department argues that the legislature did not intend the term “wages” to include health insurance for purposes of RCW 51.08.178, because it did not intend the term “wages” to include fringe benefits for purposes of RCW 39.12.010 and a number of other statutes.
The Department alleges that RCW 51.08.178 is a “compromise between workers and employers,”
The Department argues we should defer to its reading of RCW 51.08.178, or at least to the Board’s reading of that statute. We disagree. Even though the “court will defer to an agency’s interpretation when that will help the court achieve a proper understanding of the statute,”
The Department relies heavily on Morrison-Knudsen Construction Co. v. Director, Office of Workers’ Compensation Programs.
We decline to follow Morrison-Knudsen for at least
Second, the legislative history of the LHWCA is different from the legislative history of the Washington Act. As the Morrison-Knudsen Court emphasized, Congress passed the federal Act in 1927, when “employer-funded fringe benefits were virtually unknown.”
Third, and perhaps most importantly, the Morrison-Knudsen court was not asked to address the right argument. Just as the Washington statute provides that “wages” shall include items “of like nature” to food, shelter and heat, the federal statute at issue in Morrison-Knudsen provided that “wages” shall include items “of similar advantage” to food and shelter. An apparent if not obvious argument was that Congress intended to include within “wages” those employer-provided necessities that a worker must replace while disabled (including food, shelter,
Fourth, the evidence in Morrison-Knudsen was different from the evidence here. In Morrison-Knudsen, the plaintiff was claiming the reasonable value of the worker’s interest in a union trust fund, and the evidence failed to disclose a basis from which to value that interest. Here, the evidence of value is so clear that the parties have stipulated to it.
Both Cockle and the Department rely on cases from other jurisdictions. Some of those cases turn on statutes different from ours. Others follow Morrison-Knudsen’s misleading analysis. The remainder are split, and we align ourselves with those holding that the value of employer-furnished health insurance should be included in the basis from which time-loss compensation is computed.
Both Cockle and the Department rely on a passage authored by Professor Arthur Larson. He states that for over seventy years, persons computing worker’s compensation benefits “have always begun with a wage basis calculation that made ‘wage’ mean the ‘wages’ that the worker lives on and not miscellaneous ‘values’ that may or may not someday have a value to him depending on a number of uncontrollable contingencies.”
The Department argues that we should “resort to a dic
In conclusion, we hold that the term “wages” includes the reasonable value of board, housing, fuel, and “other consideration of like nature”; that “other consideration of like nature” includes and is limited to items of in-kind consideration that an injured worker must replace, while disabled, out of time-loss compensation; that health care as provided through health insurance is such an item; and thus that the reasonable value of health insurance must be included within “wages” when computing time-loss compensation. Based on these holdings, we affirm the superior court and remand to the Department for recompu-tation of Cockle’s time-loss compensation.
After modification, further reconsideration denied July 23, 1999.
Review granted at 139 Wn.2d 1014 (1999).
We use the term “health insurance” to mean both medical and dental insurance.
The library paid $162.07 per month for Cockle’s medical insurance, and $43.45 per month for her dental insurance. It also paid vacation benefits, but those are not in issue on this appeal.
Br. of Appellant at 34; see also Br. of Appellant at 20 n.9.
Clerk’s Papers at 11.
RCW 51.32.090(1), (3); Franks v. Department of Labor & Indus., 35 Wn.2d 763, 766-67, 215 P.2d 416 (1950); Davis v. Bendix Corp., 82 Wn. App. 267, 272, 917 P.2d 586 (1996); Hunter v. Bethel Sch. Dist., 71 Wn. App. 501, 506-07, 859 P.2d 652 (1993).
RCW 51.32.090(1), (3); RCW 51.32.060(1). Usually, “wages” are to be expressed in “monthly” terms. RCW 51.08.178(1) (first sentence); State v. Bodey, 44 Wn. App. 698, 705-06, 723 P.2d 1148 (1986). Because Cockle was married with three children, she was to “receive monthly . . . seventy-one percent of . . . her wages” if temporarily and totally disabled, RCW 51.32.090(1); RCW 51.32-,060(l)(d), and a portion of that percentage if temporarily and partially disabled. RCW 51.32.090(3).
Laws of 1971, 1st Ex. Sess., ch. 289, § 14.
Consideration furnished in cash is not in issue here. For a case in which it was in issue, see Rose v. Department of Labor & Indus., 57 Wn. App. 751, 758, 790 P.2d 201 (1990).
Quoted in full, RCW 51.08.178 provides:
(1) For the purposes of this title, the monthly wages the worker was receiving from all employment at the time of injury shall be the basis upon which compensation is computed unless otherwise provided specifically in the statute concerned. In cases where the worker’s wages are not fixed by the month, they shall be determined by multiplying the daily wage the worker was receiving at the time of the injury:
(a) By five, if the worker was normally employed one day a week;
(b) By nine, if the worker was normally employed two days a week;
(c) By thirteen, if the worker was normally employed three days a week;
(d) By eighteen, if the worker was normally employed four days a week;
(e) By twenty-two, if the worker was normally employed five days a week;
(f) By twenty-six, if the worker was normally employed six days a week;
(g) By thirty, if the worker was normally employed seven days a week.
The term “wages” shall include the reasonable value of board, housing, fuel, or other consideration of like nature received from the employer as part of the contract of hire, but shall not include overtime pay except in cases under subsection (2) of this section. However, tips shall also be considered wages only to the extent such tips are reported to the employer for federal income tax purposes. The daily wage shall be the hourly wage multiplied by the number of hours the worker is normally employed. The number of hours the worker is normally employed shall be determined by the department in a*74 fair and reasonable manner, which may include averaging the number of hours worked per day.
(2) In cases where (a) the worker’s employment is exclusively seasonal in nature or (b) the worker’s current employment or his or her relation to his or her employment is essentially part-time or intermittent, the monthly wage shall be determined by dividing by twelve the total wages earned, including overtime, from all employment in any twelve successive calendar months preceding the injury which fairly represent the claimant’s employment pattern.
(3) If, within the twelve months immediately preceding the injury, the worker has received from the employer at the time of injury a bonus as part of the contract of hire, the average monthly value of such bonus shall be included in determining the worker’s monthly wages.
(4) In cases where a wage has not been fixed or cannot be reasonably and fairly determined, the monthly wage shall be computed on the basis of the usual wage paid other employees engaged in like or similar occupations where the wages are fixed.
These provisions serve at least three purposes. They require that benefits be based on monthly wages. They provide methods for converting into monthly terms wages that the employer and employee have chosen to express in other terms. And they define the extent to which the term “wages” includes consideration furnished in kind by an employer to a worker. Only the last purpose concerns us here.
Other examples, the Department asserts, include life insurance benefits, stock option plans, deferred compensation plans, profit-sharing plans, social security contributions, unemployment contributions, dependent care assistance plans, group legal services plans, interest-free or low interest loan programs, savings plans, 4010k) matching plans, sick leave benefits, death and disability benefits, charitable contributions matching programs, employer-funded scholarships and fellowships, tuition waivers, and alcohol and drug rehabilitation programs. We rule only on health insurance.
Kaiser Aluminum & Chem. Corp. v. Overdorff, 57 Wn. App. 291, 295-96, 788 P.2d 8 (1990) (emphasis added).
Franks, 35 Wn.2d at 766-67; Davis, 82 Wn. App. at 272; Hunter, 71 Wn. App. at 506-07.
We do not overlook that an injured worker receives medical care from the Department for conditions related to his or her industrial injury. He or she does not receive, however, medical care for conditions not related to the injury, or medical care for his or her family. See ROW 51.36.010.
57 Wn. App. 751, 758, 790 P.2d 201 (1990).
Rose, 57 Wn. App. at 758.
In a separate section of Rose, we considered whether the prisoner’s board and room were an incident of his employment or of his confinement. That section has no bearing on the discussion here.
The cases do not always describe this “earning capacity” in the same terms. Viewing it from the perspective of the worker’s injury, some call it “future” earning capacity. E.g., Kilpatrick v. Department of Labor & Indus., 125 Wn.2d 222, 230, 883 P.2d 1370 (1994) (“the purpose of workers’ compensation benefits is to reflect future earning capacity rather than wages earned in past employment”). Viewing it from the perspective of the worker’s ensuing period of disability, others call it “lost” earning capacity. E.g., Double D Hop Ranch v. Sanchez, 133 Wn.2d 793, 798, 947 P.2d 727 (1997) (because “the purpose of time-loss compensation is to reflect a worker’s lost earning capacity,” “we should construe ROW 51.08.178 in a way that will most likely reflect a worker’s lost earning capacity”). We perceive no material difference.
This statement is subject to constitutional proscriptions, of course, but none is suggested or apparent here.
The Department’s verb is “consume.” E.g., Br. of Appellant at 8, 21. We substitute “use.”
As far as we can tell, this is what the Department means when it says that “fringe benefits such as medical and dental insurance are not readily converted to cash equivalents.” Br. of Appellant at 20.
We deem “reasonable value” to be market value. See State v. Clark, 13 Wn. App. 782, 787, 537 P.2d 820 (1975); State v. Hancock, 44 Wn. App. 297, 302, 721 P.2d 1006 (1986); Merchant v. Peterson, 38 Wn. App. 855, 858-59, 690 P.2d 1192 (1984); McCurdy v. Union Pac. R.R., 68 Wn.2d 457, 467, 413 P.2d 617 (1966).
As far as we can tell, this is what the Department means when it says that “the employers’ costs do not correlate with the employees’ benefits,” and that “fringe benefits are speculative in terms of any given employee’s ultimate realization of the benefits.” Br. of Appellant at 20.
The Department may also be arguing that because an employer often purchases health insurance for a group rather than individual, the Department will he unable to ascertain the cost incurred by the employer for the particular employee. If so, we disagree. The Department can ascertain reasonable value per employee by looking at the open market, or perhaps even from a presumptive chart (similar to that used for child support) that it might promulgate based on the open market. Additionally, many, if not most, employers track their health insurance costs per employee, and can readily inform the Department if asked.
As indicated in the preceding footnote, we do not rule out the possibility that the Department can standardize the functioning of its employees by developing and using a chart that presumptively values health insurance for different categories of workers (e.g., single, married, married with children).
Br. of Appellant at 28.
RCW 51.08.178(4).
See Kilpatrick, 125 Wn.2d at 230. The Department also states that if it is forced to value employer-furnished health insurance, it will not be able to pay claims promptly. We decline to accept that proposition, for it implies that the Department wifi, not take the steps necessary to properly perform duties assigned to it by the legislature.
Br. of Appellant at 29.
Double D Hop Ranch, 133 Wn.2d at 798.
The Department cites a variety of statutes in support of the same point. For convenience, we refer only to RCW 39.12.010.
Reply Br. of Appellant at 14.
Clark County Natural Resources Council v. Clark County Citizens United, Inc., 94 Wn. App. 670, 677, 972 P.2d 941 (1999) (citing City of Redmond v. Central Puget Sound Growth Management Hearings Bd., 136 Wn.2d 38, 46, 959 P.2d 1091 (1998); City of Pasco v. Public Employment Relations Comm’n, 119 Wn.2d 504, 507, 833 P.2d 381 (1992); Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 813-14, 828 P.2d 549 (1992); Overton v. Economic Assistance Auth., 96 Wn.2d 552, 555, 637 P.2d 652 (1981)).
Clark County Natural Resources Council, 94 Wn. App. at 677 (citing Overton, 96 Wn.2d at 555; Cowiche, 118 Wn.2d at 815); City of Redmond, 136 Wn.2d at 46.
461 U.S. 624, 103 S. Ct. 2045, 76 L. Ed. 2d 194 (1983).
Former 33 U.S.C. § 902(13).
Morrison-Knudsen, 461 U.S. at 630.
Id. at 632. The Court also considered the “national average weekly wage,” Id. at 633-34, and that “agencies charged with the enforcement and interpretation of the Act are entitled to deference.” Morrison-Knudsen, 461 U.S. at 634-35.
Id. at 636. Compare Sacred Heart Med. Ctr. v. Department of Labor & Indus., 92 Wn.2d 631, 635-36, 600 P.2d 1015 (1979).
Double D Hop Ranch, 133 Wn.2d at 798; see also RCW 51.12.010.
Kilpatrick, 125 Wn.2d at 230.
Morrison-Knudsen, 461 U.S. at 632.
Id.
Even in 1927, we think, employers may sometimes have operated large, remote labor camps that provided food, shelter and an on-site doctor or nurse. In such an instance, we find it hard to see why health care would not be “of similar advantage” to food and shelter.
2 Arthur Larson, The Law op Worker’s Compensation, § 60.12(b), at 10-635 (1990).
We do not overlook that Professor Larson clearly favors the result in Morrison-Knudsen, a case in which he personally argued the government’s position. He also chides courts not to disturb the way things have always been without a clear statutory basis for doing so. We reject Morrison-Knudsen for the reasons already set forth, and we think that RCW 51.08.178 gives a clear statutory basis for including within “wages” an item of in-kind consideration, such as health insurance, that a worker must replace during the period of his or her disability.
Br. of Appellant at 14-15; see also Br. of Respondent at 22-23.
Webster’s Third New International Dictionary 2568 (1969) (emphasis added). This definition also appears in the 1986 edition of the same dictionary. The Washington Supreme Court employed the 1986 edition in the recent case of Double D Hop Ranch, 133 Wn.2d at 799 n.11. We quote the 1969 version because the legislature adopted RCW 51.08.178 in 1971.
By motion for reconsideration made after this opinion was filed, the Department asks the court to consider two arguments never before advanced to the trial court or to this court. The court declines on the ground the arguments are untimely. Doe v. Puget Sound Blood Ctr., 117 Wn.2d 772, 780, 819 P.2d 370 (1991) (reviewing court generally will not consider theories not presented to trial court); Brin v. Stutzman, 89 Wn. App. 809, 829, 951 P.2d 291, review denied, 136 Wn.2d 1004 (1998) (same); Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549 (1992) (issue raised and argued for the first time in a reply brief is too late to warrant consideration); Bryant v. Palmer Coking Coal Co., 86 Wn. App. 204, 218, 936 P.2d 1163, review denied, 133 Wn.2d 1022 (1997) (same). The court also believes the arguments, which rest on implications from statutes never before cited or discussed, do not affect the meaning of RCW 51.08.178 as explained in the text accompanying notes 8-13.