Housing, utilities, car allowance considered remuneration

In California, determining whether fuel, lodging, and meals are remuneration requires an analysis of whether they were provided in exchange for services, whether they are an advantage to the worker, and whether they are provided to the worker only while he is performing employment duties.

Case name: Motheral v. Workers' Compensation Appeals Board, No. C06346 (Cal. Ct. App. 08/25/11).

Ruling: The California Court of Appeal held that a ranger's average weekly wage was calculated incorrectly. The court sent the case back to the Workers' Compensation Appeals Board to recalculate his AWW and disability benefits.

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What it means: In California, determining whether fuel, lodging, and meals are remuneration requires an analysis of whether they were provided in exchange for services, whether they are an advantage to the worker, and whether they are provided to the worker only while he is performing employment duties.

Summary: A park ranger injured his right ankle in the course of his employment. His right leg had to be amputated below the knee. The ranger was paid an annual salary equal to 40 hours per week at the minimum wage. His employment contract specified that his salary included payment for his living quarters and utilities at the ranger's residence. He also received payment for the use of his vehicle for business. The parties disputed whether the market value of his living quarters, utilities, and car allowance should be included in calculating his AWW and the resulting disability benefits. The court held that they were remuneration and should have been included in the calculation of his AWW.

The court said the ranger received lodging and utilities in exchange for services. Although his employment contract contemplated that a portion of the value of the lodging and utilities would be deducted from his wages, the amount was limited. The court said that if the fair market value of the lodging and utilities the ranger received exceeded the amount deducted from his wages, the excess amount was an "advantage" and should have been included in the calculation of his AWW. The car allowance was to be paid regardless of how much he drove, so it constituted remuneration.

The court sent the case back to the board to recalculate his AWW using his minimum wage salary, less the applicable lodging credit, plus the market value of his living quarters, utilities, and one-quarter of his monthly car allowance.

Read more at the WorkersComp Forum homepage.

October 24, 2011

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