PROPOSED RULES
LABOR AND INDUSTRIES
Original Notice.
Preproposal statement of inquiry was filed as WSR 01-20-091.
Title of Rule: Chapter 296-14 WAC, Industrial insurance (wage calculation).
Purpose: The purpose of the rules is to provide the methods and factors used in calculating the wage for injured workers and crime victims.
Other Identifying Information: New sections:
WAC 296-14-520 Why is it important to establish the worker's monthly wage?
• Provides basis for establishing a worker's wage.
WAC 296-14-522 What does the term "wages" mean?
• Provides definition of wages.
WAC 296-14-524 How do I determine whether an employer provided benefit qualifies as "consideration of like nature" to board, housing and fuel?
• Provides guidelines to determine if an employer provided benefit qualifies as "consideration of like nature" to board, housing and fuel under the supreme court ruling in Cockle.
WAC 296-14-526 Is the value of "consideration of like nature" always included in determining the worker's compensation?
• Implements the supreme court's Cockle decision, for determining when the value of "consideration of like nature" should be included in the worker's monthly wages under RCW 51.08.178.
WAC 296-14-528 How do I determine the value of a benefit that qualifies as "consideration of like nature"?
• Implements the supreme court's Cockle ruling for determining the value of "consideration of like nature."
WAC 296-14-530 Is overtime considered in calculating the worker's monthly wage?
• Explains how overtime is taken into consideration under RCW 51.08.178 (1) and (2).
Statutory Authority for Adoption: RCW 51.04.010, 51.04.020.
Statute Being Implemented: RCW 51.08.178.
Summary: In Cockle v. Dep't of Labor & Indus., 142 Wn.2d 801, 16 P.3d 583 (2001) the supreme court ruled that core, nonfringe benefits that are critical to protecting the worker's basic health and survival at the time of injury must be included in the monthly wages of an industrially injured or ill worker under RCW 51.08.178. The proposed rules set forth the department's interpretation of RCW 51.08.178 and the manner by which it will implement the supreme court's decision in Cockle.
Name of Agency Personnel Responsible for Drafting: Valerie Grimm, Tumwater, Washington, (360) 902-5005; Implementation and Enforcement: Georgia Moran/George Pickett, Tumwater, Washington/Olympia, Washington, 902-4300/902-6907.
Name of Proponent: Department of Labor and Industries, governmental.
Rule is necessary because of state court decision, Cockle v. Dept. of Labor & Indus., 142 Wn.2d 801, 16 P.3d 583 (2001).
Explanation of Rule, its Purpose, and Anticipated Effects: The proposed rules implement RCW 51.08.178(1) and the supreme court ruling in Cockle v. Dept. of Labor & Indus., 142 Wn.2d 801, 16 P.3d 583 (2001). The court ruled an employer's contribution to core, nonfringe benefits that are objectively critical to protecting the worker's basic health and survival at the time of injury or disease manifestation are "consideration of like nature" to board, housing and fuel. The proposed rules are intended to clarify which employer paid benefits may be included in the worker's wage and improve the public's understanding of the supreme court decision. The purpose of the proposed rules is to ensure consistent, fair, and reasonable calculation of an injured worker's or crime victim's monthly wage.
Proposal does not change existing rules.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The Washington state supreme court's holding in Cockle v. Dept. of Labor & Indus., 142 Wn.2d 801, 16 P.3d 583 (2001) altered the manner in which the department and self-insured employers interpreted and applied RCW 51.08.178. The proposed rules simply implement the supreme court's decision in Cockle. In all other respects, the proposed rules codify the department's longstanding interpretation and implementation of RCW 51.08.178.
RCW 34.05.328 applies to this rule adoption. Currently no rules exist to establish the methods and factors used in determining a worker's wage at the time of injury or on the date of disease manifestation.
Hearing Location: Department of Labor and Industries, Tukwila Office, 12806 Gateway Drive, Seattle, WA 98166-1050, on December 11, 2002, at 10:00 a.m.; and at the Department of Labor and Industries, 7273 Linderson Way S.W., Tumwater, WA 98504, on December 16, 2002, at 10:00 a.m.
Assistance for Persons with Disabilities: Contact Valerie Grimm by phone (360) 902-5005 or fax (360) 902-4960, TDD 1-800-833-6388.
Submit Written Comments to: Department of Labor and Industries, Valerie Grimm, P.O. Box 44208, Olympia, WA 98504-4208, fax (360) 902-4960, by December 24, 2002.
Date of Intended Adoption: March 19, 2003.
October 28, 2002
Gary Moore
Director
OTS-6021.1
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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(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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(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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(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; and
(c) Subsection (1)(b) of 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.
(d) 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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(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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