NO. 88-573
IN THE StJPREME COURT OF THE STATE OF MONTANA
1989
DANIEL SCYPHRRS,
Claimant and Respondent,
-VS-
H & H LUMBER,
Employer,
and
STATE COMPENSATION INSTTRANCE FTJND,
Defend-ant and Appellant.
APPEAL FROM: The Workers' Compensation Court, The Honorable Timothy
Reardon, Judge presiding.
COTJNSEL OF REC0R.D
:
For Appellant:
Jeff Hedger; Crowley Law Firm, Billings, Montana
For Respondent :
Thomas J. T,ynaugh, Billings, Montana
Submitted on Briefs: April 20, 1 9 8 9
Decided: June 1, 1 9 8 9
Mr. Justice Fred J. Weher delivered the Opinion of the Court.
The State Compensation Insurance Fund appeals a decision
by the Workers' Compensation Court. Mr. Daniel Scyphers was
injured in an industrial accident on November 21, 1986 and
was awarded temporary total disability benefits. In April of
1987, Mr. Scyphers petitioned the Workers' Compensation Court
for recalculation of his temporary total disability rate.
This matter was submitted on briefs to the examiner, who
granted a recalculation of Mr. Scyphers' rate. The Workers'
Compensation Court affirmed this decision, and the State
Compensation Insurance Fund appeals. We affirm.
The issue presented for our review is whether the three
cents per mile paid to a long haul- truck driver as per diem
is "wages" for purposes of fixing workers' compensation
benefits.
The claimant in this case, Mr. Scyphers, worked for H &
H Lumber Co. as a long haul truck driver. His hauls often
put him on the road for two or three weeks at a time.
On November 10, 1985, W & H Lumber began compensating
its long haul drivers at the rate of fourteen cents per mile,
plus three-cents-per-mile "per diem." Prior to this time,
the drivers did not receive a per diem amount. Rather, each
driver was required to keep records of expenses on the road,
such as meals and lodging, which were later reimbursed by the
company. Mr. Harding, president and general manger of H & H
Lumber, testified by deposition that it is no longer neces-
sary for drivers to keep these records. Under the new ar-
rangement, the drivers are not reimbursed for meals or
lodging, but are simply paid the per diem amount. The compa-
ny pay schedule which effectuated this change listed both the
fourteen cent and the three cent amounts under the heading,
"wages."
H & H Lumber pays its long haul drivers with two checks.
One check, reflecting the fourteen-cents-per-mile compensa-
tion, has taxes and social security withheld. The second
check, representing the three-cents-per-mile per diem amount,
has no deductions withheld. Mr. Harding testified that the
three cent figure was chosen by him because the IRS has
approved of this amount as a per mile per diem expense reim-
bursement. It is also significant that H & H Lumber pays its
short haul drivers, who work local-ly, seventeen cents per
mile, plus a fl.at daily rate of $1.5. Mr. Harding explained
that the short haul drivers do not register as many miles in
a day because they stop to make del-iveries; therefore, they
are given the additional compensation of the flat daily rate.
In reviewing a decision of the Workers' Compensation
Court, the standard of review is to determine whether suh-
stantial credible evidence exists to support the findings and
conclusions of the Workers' Compensation Court. Stangler v.
Anderson Meyers Drilling Co. (Mont. 1987), 746 P.2d 99, 101,
44 St..Rep. 1944, 1947. Findings of fact are not clearly
erroneous if they are supported by substantial credible
evidence. Tenderholt v. Travel Lodge Intern. (Mont. 1985) ,
709 P.2d 1011, 1013, 42 St.Rep. 1792, 1794.
Where the testimony in the lower court was presented
solely by deposition, this Court. is free to examine the
findings of the court more closely, as this Court is in the
same position as the Workers' Compensation Court in assessing
the evidence. Stangler, 746 P. 2d at 101-02. In the present
case al.1 testimony was presented hy deposition, thus the
broader standard of review applies.
The definition of "wages" under the Workers ' Compensa-
tion Act is set out in 4 39-71-11.6(203, MCA (1985), and
provides:
"Wages" means the average gross earnings
received by the employee at the time of the injury
for the usual hours of employment in a week, and
overtime is not to be considered. Sick leave
benefits accrued by employees of public corpora-
tion.~,as defined by subsection (16) of this sec-
tion, are considered wages.
Montana has not previously considered whether "wages,"
as this term is applied to Workers' Compensation benefits,
includes a "per diem" type of compensation. The Workers'
Compensation Court determined that the statute defining wages
simply contemplates that any gross earnings are wages, and
does not allow for any artificial distinctions. The court
found that the employer, by paying the short haul driver in
one method, and the long haul driver in another method, had
created two distinct wage classifications which "bear little
relationship to the definition of wages in the Act." The
Workers' Compensation Court suggested that tax considerations
may have motivated this arrangement, but that the Act does
not provide for this type of differentiation. The Workers1
Compensation Court then determined that the per diem amount
paid to Mr. Scyphers should be included in his wages.
We agree with the analysis of the Workers' Compensation
Court. Under the statute, "wages" simply means gross earn-
ings. We agree with the conclusion of the Arizona Supreme
Court in Hobbs v. Industrial Commission (Ariz. App. 1975),
533 P.2d 1159, 1160-61, that how the parties may have treated
a per diem amount for tax purposes is not determinative
regarding Workers1 Compensation benefits. In determining
what constitutes gross earnings, other courts have applied
the "real economic gain" rule. Ridgway v. Board of Ford
County Com'rs (Kan. App. 1987), 748 P.2d 891; Gonzales v.
Mountain States Mut. Cas. Co. (N.M. App. 1986), 728 P.2d
1369. Blake Stevens Const. v. Henion (Utah 1985), 697 P.2d
230; Moorehead v. Industrial Commission (Ariz.App. 1972), 495
P.2d 866. Under this analysis, the critical distinction is
whether a payment was actually a reimbursement for
employment-related expenses or whether it constituted real
economic gain to the employee. We approve of this analysis,
as stated by Professor Larson in his treatise on workers'
compensation:
In computing actual earnings as the beginning point
of wage-basis calculations, there should be includ-
ed not only wages and salary but any thing of value
received as consideration for the work, as, for
example, tips, bonuses, commissions, and room and
board, constituting real economic gain to the
employee. (Emphasis added.)
2 A. Larson, The Law of Workers' Compensation 5 60.12 (1987).
In the present case, the testimony demonstrates that the
three-cents-per-mile per diem was not actually reimbursement
for Mr. Scyphers' out-of-pocket employment-related expenses,
but rather constituted real economic gain to Mr. Scyphers.
Mr. Scyphers testified that when he was traveling on a long
haul he slept in the sl-eeper compartment of his truck. While
he ate meals on the road, this expense certainly continued
after he was laid off; that is, his meal expense was not tied
exclusively to his job. The per diem amount was not reim-
bursement for expenses such as truck repairs. These types of
expenses were either charged to the company credit card, or
reimbursed to Mr. Scyphers when he presented a receipt for
the repair.
Mr. Scyphers testified that he simply used the proceeds
from both checks for living expenses. Be was not required to
prove any actual employment-related expenses in order to
receive the per diem amounts, and Mr. Harding stated that the
employees could use the money to buy groceries, or anything
~ l s e . The evidence supports Mr. Scyphers' assertion that the
three-cents-per-mile per diem was gross earnings in this case
and should properly be included in his wages. We have con-
cluded that the three cents per mile constituted real econom-
ic gain to Mr. Scyphers. We affirm the decision of the
Workers' Compensation Court.
Affirmed.