Springer v. Industrial Commission
533 P.2d 1166
Ariz. Ct. App.
1975
Check Treatment

*1 Further, he was not activity he wished. holding three-legged a ketball team to required expected play ball as company picnic. Although the race at new, did so at his relatively employment and he the in this field are cases pleasure and on his time. closely analo- own principles stake are discussed gous have been to those which constantly lip service to paying We are injuries lunchtime with connection proposition Com- personal going coming and comfort general health and pensation Act not a is ” cases . it policy. find I would accident insurance the deci- phrase insert into difficult no that there is “rule It course true is of act by this court. The being sion rendered compensable injury is that an of thumb" interpretation generous being given during incurred merely because it was proscibed Nich- Supreme our Court linear mea- working hours or within olson. employer’s premises. surements affirm the award. supra. is also true that more Royall, It expansions coverage generous and more Furthermore,

appear has in the cases. Compensation an axiom that become given liberal construction Act should be effectuating the evident with a view principle placing the death burden upon industry. Clearly we are injury 533 P.2d 1166 categori- be no in an area where there can Petitioner, SPRINGER, Carol J. law has Much cal test. v. legal than grown up around factual rather The INDUSTRIAL COMMISSION of classifications, difficulty of the and the Respondent, Arizona, is enhanced the absence case at bar Restaurant, Respondent Employer, Hobo Joe's jurisdiction. precedent in this The judicial prin- requisite problem applying lies Respond Fund, State facts, when, Carrier. ent especially ciples law to the here, to a risk the accident not due GARCIA, Petitioner, Adrienne in the nature inherent merely but is incidental thereto. The INDUSTRIAL COMMISSION of Respondent, apparent each readily But it is subject on the Arizona decisions Restaurant, Respondent Employer, Ranch proposition that threaded with the activi- Compensation Fund, Respond State per- ties which are incidental to ent Carrier. duties, such as formance of 1114. Nos. CA-IC CA-IC comfort, personal to or seeking going com- Appeals of work, ing engaging in recreation and Court of Division like, satisfying completely fall short of Department C. employment” test unless “course April 15, 1975. premises employ- on occur Review June Denied today er. laid down clouds The decision line demarcation. fact that here consent encouraged game ed to or even being played

catch enough. is not ac- tivity on his even land. Since prem- was free to leave ises any engage noontime he could *2 Park, Counsel,

Robert K. by Chief George Morse, B. State Fund, Tucson, respondent for employers and carrier.

OPINION

FROEB, Judge.

The is called court in each these question cases to review the by whether received should be included in the calculation of an injured average claimant’s wage monthly compensation in a workman’s award. We they authority hold should be on the Industrial Commission Arizona v. Jor dan, (1968). P.2d 895 cases consolidated purpose opinion, being of this otherwise separate. facts are similar in both cases

that both Adrienne Garcia and Carol Springer employed were waitresses rela- tively sup- wage low base rates which were plemented substantially by paid direct- ly them to customers served. Springer per earned 90 cents hour paid by employer. wages Although she her per day tips, earned more than she $4 reported only to employer. that amount her part-time only worked and Garcia per employer. hour in her $1 day al- earned She $2.50 $3 reported though employ- she no her subject to Springer’s er. wage laws a min- the federal minimum and per hour, wage imum whereas $1.60 subject employment was Garcia’s regulation. both minimum federal cases, petitioners timely challenged no- setting average of claim status month- tice ly and notice of the Commission’s sought and review average monthly wage, court of the decision of the Com- tips in the denying inclusion of mission computation. Epp- Eppstein Davis Robert W. & that we over- Petitioners contend stein, Tucson, petitioners. of Arizona v. rule Industrial Commission supra, applica- Counsel, Jordan, construed the which Cummerford, Edward F. Chief “tips” provision excluding statutory Ariz., ble Phoe- The Industrial Commission of “wages” the definition of nix, respondent. boys, cleaning whose duties included tables workman’s find law.1 We patrons served. petitioners’ per before after were She nothing argument which portion argues that “use” of her holding in us to Jordan suades abandon in this premiums manner converts her [Assessment amount to payment compensation by the because em- Com ployer’s money. inclusive of use control of mission on the basis of *3 disagree that this an addi- legislative ac We constituted requiring is a matter 23, 895, employee’s the 28, “wage” tion to base within 448 900 9 P.2d tion.” compensa- the meaning of the workman’s (1968). reject tion law and therefore we the con- of Peti- next turn to the contention We tention. present in her Springer that factors tioner proper stated, For the reasons we affirm the de- a present not in Jordan are case but cision of the Industrial Commission both distinguish her case from basis for us to cases. holding in Jordan. First, argues her she that since WREN, wage- J., subject federal minimum to the concurs. 1938, of 29 (Fair Labor Standards Act law NELSON, Judge Presiding (dissenting). hour, per seq.) she 201 et of U.S.C. $1.60 § I must dissent from the conclusion that is a determination her entitled to by majority. reached compensation pur

“wage” for workman’s precise question presented The by these equal amount,2 poses and not to that petitions previously before the Court per reasoning merely Her 90 cents hour. Appeals of in The Industrial Commission wage minimum the federal under 23, Jordan, Ariz.App. Arizona v. 448 9 against law maintain an she could action P.2d 895 and there ruled the court employer between her for the difference not in wages be included per her wage (90 hour) cents base purposes computation average ($1.60 per minimum if the dif wage hour) monthly wages. upon It was the Jordan by tips up ference were not fact made hearing case officer based the argument, reject she this received. We excluding wage awards from the calcu- however, since we find that while dif present petitioners. lations for the I would ferential, up by tips, if not made overrule Jordan. against employer, it recoverable paid employer he is “wage” by the unless positions To decide which two required pay in fact Since em it. ought adopt, this Court consideration upon called to do so this was not given general policy must first be to the case, computing be considered in cannot underlying compensation our workmen’s monthly wage. purpose compensa- laws. The of industrial by Springer compensate employee tion is to factor in- an

The second raised lost earning capacity, bus- Maness v. The Industrial sharing with restaurant volves 557, boys. Commission of 102 Ariz. 434 Springer points that she was re- out quired pay por- (1967); Whyte a P.2d Industrial employer over 643 v. Commission, 230 the bus- 71 Ariz. 227 P.2d tion of her for the benefit of wage-tip (A) Fair La- 2. rule forth set § A.R.S. 23-1041 reads follows: (m) Act, Every employee employer 203 29 U.S.C.A. bor Standards A. of a within the (1966) provisions chapter injured hy is: of this who is “ determining a arising .In . out of and course accident employee, dependents tipped employment, such em- the amount his in event ployee death, compensation to be shall be deemed his fixed shall receive tips by chapter an amount on account on the increased basis such employer, average monthly wage injury. but determined time of ap- centum amount in excess plicable . .” rate minimum to make the the term to be (1951); the intention is not and include” believe loss, prevent susceptible interpretation. but to of this employee whole for the dependents becoming him and his interpreted “wage” in Jordan court disability charges during public period “the receives to mean portion of major care of and to take employer”, arriving at this from the and in during period. financial loss See such interpretation, relied court Powell The Industrial Commission v. previously “wage” in Bar- given definition 451 P.2d Ariz. Ambort, 167 P.2d ron v. 64 Ariz. Copper Inspiration (1969); Consolidated (1946). The test set forth Barron Smith, 355, 280 P.2d 273 78 Ariz. Co. earnings are determining whether The workmen’s laws (1955). expressed by the court: Jordan keeping liberally are to be construed view, however, that whether “It is our compassionate with the humanitarian *4 or earnings are bonus the denominated adoption, and motives which caused their commissions, they if result of the are the they interpreted in of an should be favor employee and personal efforts of the Therefore, injured employee. in case of law, in an action would be recoverable competing doubt or alternative or construc- earnings.” wages constitute tions, best ef- that construction which will Ariz.App. at at 899. P.2d of com- underlying fectuate the intention proper test for de- Assuming this to be the of loss pensating injured employee an “wage”, termining earnings are whether earning power adopted. be See in Jordan applied test as to the facts the The Industrial of Camis v. Commission contrary in a conclu- should have resulted Ariz.App. 312, 420 P.2d 35 and should sion then now. ; (1966) Bonnin v. The Industrial Commis- the earn- pronged: (1) is two This test sion of 432 P.2d ef- personal the ings must be the result of 283 (1967). they must employee; (2) forts of the and that a of these cases believe resolution in employee arguably by recoverable the be upon general policy the above considera- requirement action at law. The first an tions alone should mandate the inclusion present in factual obviously met both the tips computation the in amount the presence of in setting and Jordan. The petitioners’ wages. average monthly not requirement,'however, so the second Certainly earning the waitresses here were obvious. hour, respec- more and an than $.90 $1.00 in an ac- Tips not be would recoverable tively; earning capacitites un- their were the em- employee at law from tion wage- controvertedly fix more than this. To example, where, in a situation upon calculations their base loss poor provides employee customers with would result in so low an award as to declining they respond by to service which only wholly purpose in fail the Act’s tip. first el- to leave a of the absence taking portion of the of the loss major care test resulted ement would then have certainly during period injury, but to e., second, lack absence of the i. provide fail to minimum part em- personal effort on protect necessary injured to However, look- ployee resulted no public any dependents becoming from ing tips contract employment charges. tips fact, viewpoint, may, recoverable be Statutorily, compensation paid in- employer and in an action at law. If the jures upon wages must be based (A.R.S. § employee, in negotiations their of terms 23-1041). Therefore, in order conclude to employment contract, agreed tips are be included calcu- contemplated keep that the employee would lations, preliminarily I must find that the received, portion all or a certain “wages” does, definition, term addition to the wage paid directly “mean base employment to how very instructive employer, employer would be types negotiated are of these if he contracts employment contract breach of to: agreed demanded relin confiscated those quishment larger portion than that sub employer, the case “. . The upon. breach of contract agreed For this Holiday Restau- judice, Inn operated a against the em an action at law would lie rant, two areas for consisting of is, I ployer. Consequently, the touchstone public, called food to the one service of

believe, contracting parties whether the Cof- and the other Dining Room contemplated part of the tips would be employing waitresses Shop. fee Fair See also: remuneration. Dining the scale in the employer had set (as Labor Act of 1938 amend Standards in the per hour and Room at 50 cents seq., supra. It is ed), 29 201 et U.S.C. per Shop cents hour. Coffee at 75 other this distinction the courts of which in the the difference explained recognized, states have and it is the dis due the fact a waitress pay scale was be based the de tinction which must more Dining Room earn whether, particular termination of in a em Shop, and in the Coffee than one - situation, ployment as de understanding the wait- such was the would, course, fined in There Barron. employee testified she was resses. The where situations were hour she hired at and told 50 cents contemplated parties to be she considered keep could which *5 wages, they and in instances such her to part inducement for as a be excluded calculations. Int. from inference we only work. reasonable 1954, 3401(f); I.R.S.Regs. Rev.Code of § § this is both can from evidence draw (a)-1; 7 31.3401 CCH 1975 Stand.Fed.Tax tips employee and treated 4932, Rep. 4933, 4934.146. by employee to be as received fifí to work inducement A review law of other states case 395 S.W.2d .” having compensation workmen’s laws both respects to and in similar different some Tennessee deci- Subsequent both the (A.R.S. from the relevant statutes Arizona Jordan, supra, Deason v. Travel- and sion seq.) 23-901 et that reveals a few (La.App.1971) Co., ers Ins. 242 So.2d precise courts have issue considered reasoned: The court therein was decided. involved, many here other while states that final contention “Defendant’s question specif- have avoided the use of plaintiff received which statutory language including ic either in not be waitress, considered tips excluding from calculations. compensation. computing workmen’s statutory language those states where the weekly plaintiff’s that The facts show question, does not settle courts also testified she salary She was $32.64. fairly uniformly have decided that average of about $25 received an should be in included calculations. cor- testimony This was week in While the decisions of other states certain- co-worker, Mrs. by a roborated Jeanette ly do not bind this in the courts of state Luckie. compensation, involving matters workmen’s Com- “Malone, Workmen’s Louisiana reasoning helpful in resolving their 329, Practice, & Section pensation Law issues herein. problem as fol- page discusses Supreme Bryson Tennessee Court : lows Benton, 217 Tenn. S.W.2d tips received (1965), thoroughly jurisdictions discussed case law ‘In most includ- jurisdictions the various customers had patrons which from receipt up dealt with appears this issue if time. ed contemplated language fairly While much the decision is was such note, into worthy following entered language parties when contract employment. Apart from tations factual circumstances as we such unreported two cases of the Orleans have here. question Court of Appeal, this is still The court in Jordan relied on several open an one Louisiana.’ points in determining legislative on intent “In Goldring, Richmond v. & Weiss argument issue. It considered the Inc., 124 (La.App. So.2d 601 3rd Cir. Employment that the Security Act was to 1960) problem we considered a similar pari be read materia with the Work- involving bonuses and held as follows: Compensation Act, read, men’s which if so required an wages exclusion of ‘However, computing “In actual because a Employ- 1947 amendment to the earnings beginning-point as the ment Security specific Act deleted lan- calculations, wage basis there should guage relating “gratuities” from the wages salary be included not only Act’s “wages.”1 definition In com- thing any but of value received as con menting on argument, the court said: work, sideration for the such as “Although express we decline to Larson, bonuses.” Workmen’s opinion with reference to whether Compensation (1952), Law Section Act and the “Any money paid 60.12. Employment Security Act are to be read regarded which can be as remunera pari-materia, significant we do find it tion or reward for his services should gratuities the deletion of from the fixing compensation, included Employment Security Act’s definition of irrespective pay of whether or not the ‘wages’ legislative effectuated ac- wages,” ment form Ma tion and not regula- administrative lone, Compensa Louisiana Workmen’s tion, as in this opin- instance. It is our Thus, tion Sec. P. 446. ion that premiums assessment of properly the trial court bo considered payment compensation by the Com- nuses as well as in fixing the mission on the basis of inclusive Biggs rate. See v. Lib *6 is a legislative matter requiring Co., bey-Owens-Ford La.App. 2 Glass Ariz.App. 28, action.” 9 at 448 P.2d at Cir., 170 So. 273.’ 900. case, present apparent “In the it Although clearly Jordan, supra, dicta in paid plaintiff was a low weekly Employment reference to the Security contemplated by and was the em appears Act therein strengthen ployment earnings contract that would be court’s conclusion. I believe it weakens it. supplemented the author Under The court observed that the deletion cited, ities by plaintiff received “gratuities” from the Act’s definition of should be considered “wages” accomplished by legislative weekly earnings comput purposes for action, action, not administrative much the ing compensation.” workmen’s 242 So. less, judicial interpretation. While this 2d (Emphasis at 906 908. added.) specific was, course, correct, conclusion year, Employers Last in Commercial Un- I do not believe the result in Jordan neces- 596, ion Bryant, Ga.App. Ins. Co. v. 130 sarily followed therefrom. The deletion of 203 (1974), Georgia S.E.2d 896 court “gratuities” reference to in the defini- also problem considered the and came to tion “wages” merely changed the word- in conclusion that must be included ing definition; of the it did change computing compensa- workmen’s substance of what “wages” constituted un- tion benefits. der the Act so as to gratuities. exclude The weight authority thus leans heav- scope of’ not, fact, in ily toward tips wage compu- inclusion narrowed, rather it was broadened. As 1947, 77, 1. Laws Ch. § 14.

435 special analysis stat- Phelps con- from on an of certain stated Justice Compen- utory sections of the curring opinion in Beaman v. Westward Co., 1, 327, analysis 83 sation Act read as a whole. Its Ho Hotel 89 Ariz. 357 P.2d 23-1003, sequence: so heav- followed this (1960), 1018 relied A.R.S. A.L.R.2d § S.S., 73, 1968, 6, Repealed, 4th ily by the court in Jordan: Laws Ch. § adjustment relating to semi-annual however, that repeatedly held have “We premiums, spoke expen- in terms of limita- constitutional absence of diture, but to “the amount also referred in its tions, power Legislature of the 23- paid by (the employer). him” A.R.S. § Therefore, it de- plenary. when field is 6, 965, 1968, S.S., Repealed, Laws 4th Ch. ‘wages clares that means all remuneration 73, related the lien of Com- the State source’ for services whatever from pensation against Fund interests the em- oth- authority to hold courts are without premium payments who defaulted on term is all inclusive. erwise. The above “pay- spoke employer’s in terms of the language It is than the deleted broader books, roll.” 23-926 refers to “All A.R.S. § existing prior the act to the from payrolls records and of the show- appellee Any relief amendment. ing any way ex- reflecting Legislature.” with the exclusively rests penditure employer.” of the And A.R.S. § (Second at at P.2d 331. 89 Ariz. payroll up- refers to amount of 23-984 “the emphasis supplied.) premium com- on which workmen’s scope If the deletion in fact made pensation be the insur- insurance to Employment “wages” broader in the Secu- After ance carrier is based .” Act, Act and the Workmen’s rity and that pro- statutory setting forth the above-listed pari Compensation Act are to be read in visions, the said: court materia, opposite then the exact conclusion provisions foregoing “Each of the indi- Tips should be included follow. legislative cates a intent that the assess- wages under both Acts. compensation premi- ment of workmen’s Also, if Acts be read these two were to wage expenditures ums to be based on materia, pari language the court employer, payroll of the 291, 295, Wayland, 61 Ariz. Gaskin by employees gratuities on received indica- would be P.2d patrons employer.” philosophical approach to general tive of a 448 P.2d interpreting the Acts: taken are, very at the I believe those sections pertinent “An defi- examination of the least, susceptible interpretation of an Unemployment Compensa- nitions in *7 position. “pay- The term support of either readily apparent tion Act it that make roll”, understood, commonly does mean as . ‘wages’ such words as . . flowing from only money the amount of Act, when used in the are not used in- employer directly and would having rigid, precise words of art as However, tips. “payroll” is not the clude rather, meanings, and restricted but here, dispositive 23-926 term and A.R.S. § itself, as defined the Act are used as may only not be the implies payroll that description, evidencing terms of broad a “wage part employer’s component legislative give intent to to the Act a books, referring In to “all expenditure.” broad coverage and liberal to the end payrolls employer show- of the records far-reaching effects of unem- wage ex- reflecting any way ing or ployment may be alleviated.” legislature penditure employer” the of the Accord, Unemployment Comp. Comm. v. critical indicating “wages” is the Co., Standard Life Ins. 215 N.C. element, if payroll only Jefferson is not the term and 479, 2 (1939). S.E.2d 584 items records reveal other other books and expenditure into the Jordan that which entered further based its conclusion payroll. legislature tips besides intended to exclude view, my any employer more than an language of 23-926 does A.R.S. § can avoid federal income and issue which I believe to be ut- raise an liability keep tips withholding by failing tax importance if are to be construed to most required by records the I.R.S. being within the definition expenditures” employer. “wage of the Finally, I would consider the effect of question of ad- really goes The issue to the pertains this decision as it to the insurers though lan- feasibility, ministrative actually pay compensa who the workmen’s give does a stat- guage of 23-926 A.R.S. § compen Clearly tion benefits. workmen’s proper approach I deem utory basis sation must be based on sound insurance Respondents of an ad- have warned here. principles. and actuarial Cf. Wisconsin result nightmare which could ministrative Comp. Rating Inspection Bureau v. wages include holding from a Mortensen, Wis. 277 N.W. regulations numerous view of the (1938). principles upset These would be if requiring em- Internal Revenue Service my a given retroactive effect were to be keep in most of ployers tips to records on Therefore, pursuant views in this case. concerned instances would here be we Hollywood In Continental Films v. supra, with, I.R.S.Regs. (a)-l, 31.3401 dustrial Commission 19 Ariz. illusory danger appears more than App. 234, (1973), I 506 P.2d 274 real. Jordan, supra, overruling pro make the spective only. is based Secondarily, this conclusion wording 23-926. of A.R.S. § Struckmey- IWhile concur with Justice upon an already That em- places section er’s recent comment about stare decisis duty keeping accurate records Kautz, contained Goldman v. 111 Ariz. rea- “wage expenditures”, and under a appears me 531 P.2d 1138 term, meaning of this sonable view of ample there are reasons to overrule Jordan by the em- includes records of earned in 1975. ployee. The award set and I re- should be aside Requiring regular that a record of the spectfully dissent. tips exist before can be found to approach include to the tak- similar Jersey

en in New where statute are regular kept. if are included records Burpee Municipal Im- See Princeton v. Co., provement N.J.Super. 213 A.2d 533 P.2d 1173 (1965). Arizona, Appellant, The STATE of under would hold that may Act include SABARTINELLI, Appellee. Santino contemplated by when those No. 2 CA-CR 482. parties to the contract be a remuneration Appeals Court of proper performed, and for services when Division kept by record of such April 17, 1975. *8 regular business. course records would form a basis for both Such premiums to be assessed him and for injured employee that his claim actually higher the base than employer. to him the directly not, course,

An employer could avoid keep liability deliberately failing to contemplated by records the statute both