WSR 03-11-035

PERMANENT RULES

DEPARTMENT OF

LABOR AND INDUSTRIES

[ Filed May 15, 2003, 10:24 a.m. ]

Date of Adoption: May 15, 2003.

Purpose: Worker wage calculation, chapter 296-14 WAC, the purpose of the rules is to provide the methods and factors used in calculating the monthly wage of injured workers and crime victims under RCW 51.08.178. These rules interpret and implement the supreme court's decision in Cockle v. Department of Labor and Industries, 142 Wn.2d 801 (2001).

Statutory Authority for Adoption: RCW 51.04.010, 51.04.020.

Other Authority: Cockle v. Department of Labor and Industries, 142 Wn.2d 801 (2001) (directs that the amount of employer contributions for "core, nonfringe benefits critical to protecting the basic health and survival of workers" must be included in the worker's monthly wages under Title 51 RCW).

Adopted under notice filed as WSR 02-22-028 on October 28, 2002.

Changes Other than Editing from Proposed to Adopted Version: The department made a format change in the numbering of WAC 296-14-526. This change was made for clarity purposes. The meaning itself, however, remains the same.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 6, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 6, Amended 0, Repealed 0.
Effective Date of Rule: Thirty-one days after filing.

May 15, 2003

Paul Trause

Director

OTS-6021.2


NEW SECTION
WAC 296-14-520   Why is it important to establish the worker's monthly wage?   The department or self-insurer is required to establish a monthly wage that fairly and reasonably reflects workers' lost wages from all employment at the time of injury or date of disease manifestation. This monthly wage, which is calculated using the formulas in RCW 51.08.178, represents the worker's lost earning capacity. This monthly wage is used to calculate the rate of the worker's total disability compensation or beneficiary's survivor benefits under Washington's Industrial Insurance Act.

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NEW SECTION
WAC 296-14-522   What does the term "wages" mean?   The term "wages" is defined as:

(1) The gross cash wages paid by the employer for services performed. "Cash wages" means payment in cash, by check, by electronic transfer or by other means made directly to the worker before any mandatory deductions required by state or federal law. Tips are also considered wages but only to the extent they are reported to the employer for federal income tax purposes.

(2) Bonuses paid by the employer of record as part of the employment contract in the twelve months immediately preceding the injury or date of disease manifestation.

(3) The reasonable value of board, housing, fuel and other consideration of like nature received from the employer at the time of injury or on the date of disease manifestation that are part of the contract of hire.

Exception: Payments for items other than board, housing, fuel or other consideration of like nature made by the employer to a trust fund or other entity for fringe benefits do not constitute wages.

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NEW SECTION
WAC 296-14-524   How do I determine whether an employer provided benefit qualifies as "consideration of like nature" to board, housing and fuel?   To qualify as "consideration of like nature" the employer provided benefit must meet all of the following elements:

(1) The benefit must be objectively critical to protecting the worker's basic health and survival at the time of injury or date of disease manifestation.

(a) The benefit must be one that provides a necessity of life at the time of injury or date of disease manifestation without which employees cannot survive a period of even temporary disability.

(b) This is not a subjective determination. The benefit must be one that virtually all employees in all employment typically use to protect their immediate health and survival while employed.

(c) The benefit itself must be critical to protecting the employee's immediate health and survival. The fact that a benefit has a cash value that can be assigned, transferred, or "cashed out" by an employee and used to meet one or more of the employee's basic needs is not sufficient to satisfy this element.

(2) The benefit must be readily identifiable. The general terms and extent of the benefit must be established through the employer's written policies, or the written or verbal employment contract between the employer and worker (for example, a collective bargaining agreement that requires the employer to pay a certain sum for the employee's health insurance).

(3) The monthly amount paid by the employer for the benefit must be reasonably calculable (for example, as part of the employment contract, the employer agrees to pay three dollars for each hour worked by the employee for that person's health insurance).

Examples of benefits that qualify as "consideration of like nature" are medical, dental and vision insurance provided by the employer.

Examples of benefits that do not qualify as "consideration of like nature" are retirement benefits or payments into a retirement plan or stock option, union dues and life insurance provided by the employer.

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NEW SECTION
WAC 296-14-526   Is the value of "consideration of like nature" always included in determining the worker's compensation?   (1) No. The value of other consideration of like nature is only included in the worker's monthly wage if:

(a) The employer, through its full or partial payment, provided the benefit to the worker at the time of injury or on the date of disease manifestation;

(b) The worker received the benefit at the time of injury or on the date of disease manifestation.

This section is satisfied if, at the time of injury or on the date of disease manifestation:

(i) The employer made payments to a union trust fund or other entity for the identified benefit; and

(ii) The worker was actually eligible to receive the benefit.

Example: At the time of the worker's industrial injury, the employer paid two dollars and fifty cents for each hour worked by the employee to a union trust fund for medical insurance on behalf of the employee and her family. If the employee was able to use the medical insurance at the time of her injury, the employer's monthly payment for this benefit is included in the worker's monthly wage, in accordance with (d) of this subsection. This is true even where the worker's eligibility for this medical insurance is based primarily or solely on payments to the trust fund from past employers.

(c) The worker or beneficiary no longer receives the benefit and the department or self-insurer has knowledge of this change.

If the worker continues to receive the benefit from a union trust fund or other entity for which the employer made a financial contribution at the time of injury or on the date of disease manifestation, the employer's monthly payment for the benefit is not included in the worker's monthly wage.

Example: An employer contributes two dollars and fifty cents for each hour an employee works into a union trust fund that provides the employee and her family with medical insurance. If the employer stops contributing to this fund, but the worker continues to receive this benefit, the employer's monthly payment for the medical insurance is not included in the worker's monthly wage.

(2) This rule does not permit the department or self-insurer to alter, change or modify a final order establishing the worker's monthly wage except as provided under RCW 51.28.040.

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NEW SECTION
WAC 296-14-528   How do I determine the value of a benefit that qualifies as "consideration of like nature"?   The amount paid by the employer for the benefit at the time of injury or on the date of disease manifestation represents the amount that may be included in the worker's monthly wage.

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NEW SECTION
WAC 296-14-530   Is overtime considered in calculating the worker's monthly wage?   (1) When the worker's monthly wage is computed under RCW 51.08.178(1), only the overtime hours the worker normally works are taken into consideration.

(2) When the worker's monthly wage is computed under RCW 51.08.178(2), the overtime pay is included in determining the worker's wages.

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