Springer v. Industrial Commission

OPINION

FROEB, Judge.

The court is called upon in each of these cases to review the question whether tips received by an employee should be included in the calculation of an injured claimant’s average monthly wage in a workman’s compensation award. We hold they should not be on the authority of Industrial Commission of Arizona v. Jordan, 9 Ariz.App. 23, 448 P.2d 895 (1968). The cases are consolidated only for the purpose of this opinion, being otherwise separate.

The facts are similar in both cases in that both Adrienne Garcia and Carol Springer were waitresses employed at relatively low base wage rates which were supplemented substantially by tips paid directly to them by the customers they served. Springer earned 90 cents per hour in wages paid by her employer. Although she earned more than $4 per day in tips, she reported only that amount to her employer. Garcia worked part-time only and was paid $1 per hour in wages by her employer. She earned $2.50 to $3 per day in tips, although she reported no tips to her employer. Springer’s employment was subject to the federal minimum wage laws and a minimum wage of $1.60 per hour, whereas Garcia’s employment was not subject to federal minimum wage regulation. In both cases, petitioners timely challenged the notice of claim status setting average monthly wage and the Commission’s notice of average monthly wage, and sought review by this court of the decision of the Commission denying inclusion of tips in the wage computation.

Petitioners contend that we should overrule Industrial Commission of Arizona v. Jordan, supra, which construed the applicable statutory provision as excluding “tips” from the definition of “wages” in the *431workman’s compensation law.1 We find nothing in petitioners’ argument which persuades us to abandon the holding in Jordan that . . [Assessment of premiums and payment of compensation by the Commission on the basis of wages inclusive of tips is a matter requiring legislative action.” 9 Ariz.App. 23, 28, 448 P.2d 895, 900 (1968).

We next turn to the contention of Petitioner Springer that factors present in her case but not present in Jordan are a proper basis for us to distinguish her case from the holding in Jordan.

First, she argues that since her wages are subject to the federal minimum wage-law (Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq.) of $1.60 per hour, she is entitled to a determination that her “wage” for workman’s compensation purposes is equal to that amount,2 and not merely 90 cents per hour. Her reasoning is that under the federal minimum wage law she could maintain an action against her employer for the difference between her base wage (90 cents per hour) and the minimum wage ($1.60 per hour) if the difference were not in fact made up by tips she received. We reject this argument, however, since we find that while the differential, if not made up by tips, would be recoverable against the employer, it is not “wage” paid by the employer unless he is in fact required to pay it. Since the employer was not called upon to do so in this case, it cannot be considered in computing the monthly wage.

The second factor raised by Springer involves sharing tips with restaurant busboys. Springer points out that she was required by her employer to pay over a portion of her tips for the benefit of the busboys, whose duties included cleaning tables before and after patrons were served. She argues that the “use” of a portion of her tips in this manner converts her tips in that amount to “wages” because of the employer’s use and control of her money. We disagree that this constituted an addition to the employee’s base “wage” within the meaning of the workman’s compensation law and therefore we reject the contention.

For the reasons stated, we affirm the decision of the Industrial Commission in both cases.

WREN, J., concurs.

. A.R.S. § 23-1041 (A) reads as follows:

A. Every employee of a employer within the provisions of this chapter who is injured hy accident arising out of and in the course of employment, or his dependents in event of his death, shall receive compensation fixed in this chapter on the basis of such employee’s average monthly wage at the time of injury.

. The wage-tip rule set forth in the Fair Labor Standards Act, 29 U.S.C.A. § 203 (m) (1966) is:

“ . . .In determining the wage of a tipped employee, the amount paid such employee by his employer shall be deemed to be increased on account of tips by an amount determined by the employer, but not by an amount in excess of 50 per centum of the applicable minimum wage rate . . . .”