W.C. No. 4-525-398.Industrial Claim Appeals Office.
August 27, 2003.
FINAL ORDER
The claimant seeks review of a supplemental order of Administrative Law Judge Friend (ALJ), which denied a claim for temporary partial disability benefits. The claimant contends the ALJ erred in determining that §8-42-124(2)(a), C.R.S. 2002, entitled the employer to take a credit for wages paid to the claimant. We reverse.
The claimant, a police officer, sustained compensable injuries on December 6, 2001. As a result of restrictions imposed upon the claimant he was unable to continue performing all of the duties of his regular employment. However, the claimant was transferred to the “Limited Duty Section” where he continued to perform some work and receive his full pay.
At the time of the injury, the claimant held contemporaneous employment as a security guard for a motel. In this job the claimant earned $150 per week.
Following the injury the claimant utilized sick leave for an undetermined period of time. However, the claimant requested that the sick time be reinstated because he was injured in a line-of-duty accident. The employer granted this request.
Applying § 8-42-124(2)(a), the ALJ concluded the self-insured employer is entitled to a credit against its liability for benefits because it continued to pay the claimant a sum in excess of the temporary total disability benefits prescribed by the Act. In fact, the ALJ noted, the maximum temporary total disability rate applicable to the injury is $645.96, and the claimant’s regular pay exceeded this amount. The ALJ further found that because the employer returned the sick leave to the claimant, it was not shown that the employer “charged” the claimant’s sick leave within the meaning of the statute.
On review, the claimant contends § 8-42-124(2)(a) is not applicable because the claimant returned to work and was not “temporarily disabled” within the meaning of the statute. Alternatively, the claimant argues the ALJ’s findings of fact establish that he was “charged” sick leave . Therefore, the claimant reasons that no credit is permitted by the statute. Because we agree with the claimant’s second argument, we need not address the first.
Section 8-42-124(2)(a) provides as follows:
Any employer who is subject to the provisions of articles 40 to 47 of this title and who, by separate agreement, working agreement, contract of hire, or any other procedure, continues to pay a sum in excess of the temporary total disability benefits prescribed by articles 40 to 47 of this title to any employee temporarily disabled as a result of any injury arising out of and in the course of such employee’s employment and has not charged the employee with any earned vacation leave, sick leave, or other similar benefits
shall be reimbursed if insured by an insurance carrier or shall take credit if self-insured to the extent of all moneys that such employee may be eligible to receive as compensation or benefits for temporary partial or temporary total disability under the provisions of said articles, subject to the approval of the director. (Emphasis added).
In Soppe v. City of Colorado Springs, W.C. No. 4-130-885 (February 28, 1997) [copy in record], a panel of the Industrial Claim Appeals Office determined that the statutory phrase “has not charged” is “unambiguous, and means that no charge has been made.” In that case, the claimant was temporarily disabled between March 28, 1992 and June 10, 1992. The employer disputed liability for the injury, but the claimant applied for and continued to receive his regular wages pursuant to the employer’s wage continuation plan. During this period of time the employer “charged” the wages against the claimant’s sick leave. In 1995, after a finding of compensability, the employer filed a final admission of liability for temporary disability benefits, but it claimed a credit for the wages paid the claimant pursuant to § 8-42-124. The employer then “issued a memo directing its payroll department to reinstate the sick leave, which had been charged to the claimant.”
The Soppe panel rejected the argument that, for purposes of §8-42-124(2)(a), the employer’s action in “reinstating” the sick leave nullified the effect of the employer’s action in depleting or “charging” the claimant’s sick leave. The panel noted that the intent of the statutory provision which prohibits charging sick leave is that earned benefits “should not be impaired by the employee’s work-related injury.”See Public Service Co. v. Johnson, 789 P.2d 487 (Colo.App. 1990). I Soppe, this statutory purpose was contravened because the belated reinstatement of the sick leave presented “tax complications” which prevented the claimant from “being made whole following the respondent’s reinstatement.”
More importantly, the Soppe panel noted that the overall purpose of the Act is to assure the quick and efficient delivery of benefits to injured workers without the necessity of litigation. Section 8-40-102(1), C.R.S. 2002. The panel reasoned that treating retroactive reinstatement of previously charged sick or vacation benefits, and leaving the timing of such reinstatement to the discretion of the employer, would contravene this statutory purpose because it would inevitably require administrative determinations of whether the claimant has been made whole in countless factual situations. Thus, the Soppe panel opted for a strict construction of the statute and determined that once sick leave or vacation time has been “charged” against the claimant the employer may not reclaim the right to the credit by simply “reinstating” the depleted benefit.
We find the reasoning in Soppe to be persuasive. Thus, we conclude that once an employer effects the administrative decision to “charge” an employee’s sick or vacation time the “charge” may not be rescinded and the credit recaptured by the decision to reinstate the benefit. In our view, it is impossible to enunciate a principled and manageable rule which defines when the charging of sick or vacation time, followed by the reinstatement of such benefits, constitutes a “charge” for purposes of § 8-42-124(2)(a).
Moreover, this conclusion is consistent with Rule of Procedure XI (E), 7 Code Colo. Reg. 1101-3 at 41. As the statute provides, wage continuation plans are subject to the approval of the Director of the Division of Workers’ Compensation (Director). Rule XI (E) governs applications of employers for “authorization” to proceed under the wage continuation provisions of § 8-42-124 (2). Rule XI (E)(2)(b) requires that an application shall contain a statement that “employees will not be charged with earned vacation leave, sick leave, or other similar benefits during the period the employer is seeking a credit for reimbursement.” Thus, an employer who has received the Director’s authorization to proceed under § 8-42-124(2) has, as a condition of approval, certified that it will not charge a claimant’s sick or vacation leave during any period for which it seeks credit. The authorized employer’s certification and Rule XI (E) provide authorized employers with sufficient notice that they must not charge the accounts of eligible employees and hope to claim a credit by “reinstating” previously charged benefits.
Here, the ALJ’s findings establish that the employer “charged” the claimant’s sick leave during a portion of the period for which the credit is claimed. That is the only plausible conclusion from the finding that the claimant “utilized” sick leave and that the employer “returned” the sick leave. (Finding of Fact 3). For the reasons stated above, reinstatement of the sick leave was insufficient to negate the fact that the sick leave was charged in the first place.
Further, we conclude the employer is not entitled to claim any credit here. As the proponent of the credit, the employer had the burden of proving the statutory conditions necessary to establish a right to the credit. Safeway, Inc. v. Industrial Claim Appeals Office, 968 P.2d 162
(Colo.App. 1998). Thus, the employer was required to establish that it continued to pay the claimant in excess of the temporary total disability benefits prescribed by the Act, and to establish that it did not charge the claimant with sick leave.
As we have concluded, the ALJ’s findings establish that the employer charged the claimant with sick leave during part of the period for which the credit is sought. We assume, arguendo, that once an employer stops charging the claimant’s sick time it may claim a credit so long as the other criteria are established. However, in this case the employer failed to establish the specific periods of time during which it charged the claimant’s sick leave, making it impossible to determine when the credit would apply. Thus, the employer failed to meet its burden of proof.
Under these circumstances, the ALJ’s order denying temporary partial disability benefits is reversed. Temporary partial disability benefits shall be paid under the formula set forth in § 8-42-106(1), C.R.S. 2002.
IT IS THEREFORE ORDERED that the ALJ’s supplemental order dated May 15, 2003, is reversed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Bill Whitacre
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a Petition to Review with the Court, within twenty (20) days after the date this Order was mailed, pursuant to §8-43-301(10) and § 8-43-307, C.R.S. 2002. The appealing party must serve a copy of the Petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this order were mailed to the parties at the addresses shown below on August 27, 2003 by A. Pendroy.
Stephen Barnhill, 7440 E. Harvard Ave., #206, Denver, CO 80231
Mary Padilla, Claims Adjuster, Workers’ Compensation Unit, City and County of Denver,
201 W. Colfax Ave., Dept. 1105, Denver, CO 80202
Laurence J. Free, Esq., 1199 Bannock St., Denver, CO 80204 (For Claimant)
John D. Beckman, Esq., 201 W. Colfax Ave., Dept. 1108, Denver, CO 80202 (For Respondent)