W.C. No. 4-250-136Industrial Claim Appeals Office.
September 17, 1998
FINAL ORDER
The respondents seek review of a final order of Administrative Law Judge Friend (ALJ), which concluded that “lease payments” made by the employer for use of the claimant’s vehicle should be included in the average weekly wage. We affirm.
The claimant was employed as a courier for respondent Pony Express. The claimant typically worked eleven and one-half hours per day.
At the time of the injury, the claimant was paid $94 per day. However, allocation of the payment was made pursuant to a “Motor Vehicle Equipment Lease.” Under this document, the claimant agreed to “lease” his personal vehicle to Pony Express in exchange for “a daily rent.” The daily rent was to be calculated “at a floating rate” pursuant to the following lease provision:
“From a base factor of [$94 at the time of injury], to be paid for each full day in which Lessee uses the vehicle, Lessee shall subtract the wages earned by Lessor/employee, whose wage rate is $4.35 per hour, for operating the vehicle on any given day, with the remainder being equipment rent for said day. Said equipment rent shall not be included in calculating benefits, specifically including worker’s compensation benefits, to which employee may become entitled.” (Emphasis in original.)
The lease further provided that claimant was required to furnish the vehicle to Pony Express whether or not he was able to work on a particular day.
Relying on Sneath v. Express Messenger, 861 P.2d 453
(Colo.App. 1994), the ALJ found that the portion of the daily payment attributed to equipment rental should be included in the claimant’s average weekly wage. In support, the ALJ stated there was “no rational or realistic relationship between the `floating rate’ of the lease payment and the actual rental value” of the claimant’s vehicle. This was because “the purported rental [value] was in fact inversely proportional to the amount of time the vehicle was in use.” Further, the ALJ found there was little evidence regarding the reasonable rental value of the claimant’s 1976 Toyota, and noted the rental value would have been the same had the claimant possessed “a brand new Cadillac.” Consequently, the ALJ determined the claimant’s average weekly wage was $470 ($94 per day times five days per week).
On review, the respondents contend the ALJ erred insofar as he included the value of the lease payment in the claimant’s average weekly wage. In essence, the respondents assert that the lease payment did not constitute compensation for services rendered by the claimant, but was compensation for use of his vehicle. The respondents rely on the lease provision indicating that the claimant was required to provide Pony Express with a vehicle regardless of whether he was able to work. We are not persuaded.
Section 8-40-201(19)(a), C.R.S. 1998, defines wages as the “money rate at which the services rendered are recompensed under the contract of hire in force at the time of the injury, either express or implied.” Generally, the “money rate” refers to the claimant’s gross compensation without regard to expenses which the claimant must incur to earn the wage. Filippone v. Industrial Commission, 41 Colo. App. 322, 590 P.2d 977 (1978).
In Sneath v. Express Messenger, supra, the claimant, a courier, was paid a flat rate “commission” based on deliveries. Because government regulations required the employer to either own or lease the vehicles used by its employees, the employer executed a lease for the claimant’s personal vehicle. The claimant received no rent for the lease of the vehicle, and was required to pay all expenses incurred in operating the vehicle. However, the employer designated one-half of the claimant’s commissions as “expense reimbursement” for operation of the vehicle.
The Sneath court rejected the respondents’ argument that the designated amount of one-half of the claimant’s commissions constituted “expense reimbursement,” and therefore, should be excluded from the claimant’s average weekly wage. The court noted the general rule that, under § 8-40-201(19)(a), gross compensation, not net profit, constitutes a claimant’s wages. The court went on to state the following:
“Further, we also conclude that an employer cannot evade its responsibility to its employee under the Workers’ Compensation Act by labelling a portion of the compensation paid to that employee as an expense reimbursement, at least in those instances, as here, in which there is no rational or realistic relationship between the employee’s actual expenses and the amount claimed as a reimbursement.”
Here, the ALJ’s findings of fact support application of the principles set forth in Sneath. The evidence demonstrates that the lease agreement between the claimant and Pony Express permitted variation in the daily rental value of the automobile depending on the amount of work performed by the claimant. Although the rental value decreased with increased use of the vehicle, the claimant’s overall compensation never changed. Consequently, a plausible inference to be drawn from the record is that the $94 per day payment was actually compensation for the claimant’s daily services, not a rational and realistic determination of the rental value of the vehicle. Moreover, unless the claimant owned a pickup, Pony Express did not alter the daily payment regardless of the type of vehicle leased to it.
It is true there are factual differences between Sneath and this case. However, these factual differences do not alter the general principle that employers may not arbitrarily designate a portion of the claimant’s cash compensation as payment for something other than the claimant’s services. The factors identified by the ALJ support the conclusion that, in this case, Pony Express attempted to do exactly that.
We have considered the respondents’ reliance on our decision in Guerrero v. Pony Express Courier, W.C. No. 4-114-900 (August 30, 1993). However, we agree with the ALJ that the rationale which we employed in Guerrero was significantly undermined by the principles subsequently announced in Sneath. Therefore, we agree with the claimant that the ALJ properly relied on Sneath in resolving the issue of the average weekly wage.
IT IS THEREFORE ORDERED that the ALJ’s order dated September 2, 1997, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Bill Whitacre
NOTICE This Order is final unless an action to modify or vacate theOrder is commenced in the Colorado Court of Appeals, 2 East 14thAvenue, Denver, Colorado 80203, by filing a petition to reviewwith the court, with service of a copy of the petition upon theIndustrial Claim Appeals Office and all other parties, withintwenty (20) days after the date the Order was mailed, pursuant to§§ 8-43-301(10) and 307, C. R. S. 1997.
Copies of this decision were mailed September 17, 1998 to the following parties:
Joseph Palumbo, 3600 E. 88th Ave., #28, Thornton, CO 80229
Pony Express Courier Corporation, Attn: Lynn Lagrone, 5478 Washington St., Denver, CO 80216-1731
Pony Express Courier, Attn: Gary Casson, P.O. Box 35206, Charlotte, NC 28235-5206
Constitution State Service, Co., Attn: Jerry McClory, P.O. Box 173762, Denver, CO 80217-3762
Continental Insurance Co., P.O. Box 17369 T. A., Denver, CO 80217-0930
Paul F. Lumbye, III, Esq., Two Steele St., #202, Denver, CO 80206 (For Claimant)
Ted A. Krumreich, Esq., 1225 17th St., 28th floor, Denver, CO 80202-5528 (For Respondents)
By: _______________________