Brief Description: Defining wages for industrial insurance purposes.

Sponsors: Representatives Conway and Wood.

Hearing Date: 2/28/05

Staff: Jill Reinmuth (786-7134).

Background:

Workers injured in the course of employment may receive various benefits under the Industrial Insurance Act. Compensatory benefits (time-loss, pension, and survivor benefits) for injured workers or their surviving beneficiaries are based on the monthly wages that the worker was receiving from all employment at the time of injury. For most purposes, wages include:

• the reasonable value of board, housing, fuel, or other consideration of like nature received from the employer;
• health care benefits (except during the periods the employer continues to provide it), valued at the employer's cost, under a decision by the Washington Supreme Court in Cockle v. Department of Labor and Industries;   
• tips reported for federal income tax purposes; and
• the average monthly value of bonuses received from the employer in the preceding 12 months.

Overtime pay is not included, but, under rules adopted by the Department of Labor and Industries (Department), overtime hours are included at the regular pay rate.

For workers who are exclusively seasonal or whose relationship with their employment is essentially part-time or intermittent, the same wage definition is used, except that overtime is included at the overtime pay rate.

Rules adopted by the Department on "consideration of like nature" (including health care benefits) specify that the value of such consideration is only included in wages if:

• The employer provided the benefit to the worker at the time of injury;
• The worker received the benefit at the time of injury; and
• The worker or beneficiary no longer receives the benefit and the Department or self-insurer has knowledge of this change.

With respect to the requirement that the worker no longer receive the benefit, the rules further specify that, if the worker continued 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, the employer's monthly payment for the benefit is not included in wages.

Summary of Bill:

The definition of wages is modified to exclude health care benefits during periods in which employers continue to make contributions toward such benefits (rather than during periods in which employers provide such benefits).

Rules Authority: The bill does not contain provisions addressing the rule-making powers of an agency.

Appropriation: None.

Fiscal Note: Requested on February 25, 2005.

Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.