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Swearingen v. Industrial Commission

August 24, 1998


The opinion of the court was delivered by: Justice Rarick delivered the opinion of the court:


Appeal from the Circuit Court of Marion County.

Nos. 96-MR-48 & 96-MR-66

Honorable David Sauer, Judge, presiding.

Claimants, Donna Swearingen and Ronald Scroggins, sought benefits pursuant to the Workers' Compensation Act (Act) (820 ILCS 305/1 et seq. (West 1992)) for injuries received while in the employ of Henderson Trucking (Henderson). Both were long-haul truck drivers. Swearingen was a "second driver" on a two-person crew and was earning 11 cents per mile. Scroggins was a driver-in-training earning 10 cents per mile. Both were paid approximately $400 per week. In addition, drivers who completed one year of employment during which they logged 140,000 miles were eligible for one week's vacation pay of $400. Swearingen was injured while lifting the bunk in the tractor of her truck in Salinas, California, on November 6, 1992. Scroggins was injured when he fell from a loading dock while unloading a truck in Torrance, California, on August 6, 1992. Arbitration hearings were held in each case. In both cases, the claimant's average weekly wage for temporary total disability (TTD) purposes was determined to be approximately $200. This determination was based upon the testimony of Terry Burnett, Henderson's safety director. Burnett testified that Henderson treats 50% of all drivers' gross pay as reimbursement for travel expenses, rather than earned income. This money was to cover drivers' personal expenses. Drivers were not required to turn in any expense report or receipts. The travel expense allowance did not cover the cost of fuel, tolls, or repairs; lead-seat drivers were reimbursed separately for those expenses. Swearingen testified that she was not reimbursed for lodging or meals or other expenses, except fuel and truck-related expenses. She did not pay income taxes on the expense-reimbursement portion of her check. Scroggins paid income taxes on the expense reimbursement, based on the advice of his accountant. The only other travel expense incurred by either claimant was for meals. Swearingen was awarded 82 2/7 weeks of TTD benefits, based on an average weekly wage of $412.02. Scroggins was awarded 45 3/7 weeks of TTD benefits based on an average weekly wage of $196.86. The arbitrator calculated Scroggins' average weekly wage to be one-half of his gross pay. The arbitrator determined that one-half of Scroggins' gross pay was not earned income but was reimbursement for travel expenses. The arbitrator also awarded Scroggins permanent partial disability (PPD) benefits, finding him to be permanently partially disabled, to the extent of 5% of the person as a whole, and to have suffered a 10% loss of the use of his left arm.

The Illinois Industrial Commission (Commission) reversed the arbitrator's decision in Swearingen's case, finding Swearingen's average weekly wage to be $207.01. The Commission found that half of Swearingen's pay constituted a reimbursement for per diem travel expenses and as such constituted fringe benefits excluded under section 10 of the Act (820 ILCS 305/10 (West 1992)). In Scroggins' case, the Commission modified the PPD award, finding that Scroggins had lost 15% of the use of his left arm. The Commission otherwise affirmed and adopted the decision of the arbitrator. Commissioner Kinnamon dissented, disagreeing with the majority's Conclusion that 50% of Scroggins' pay represented per diem travel expenses. The cases were consolidated for purposes of judicial review, and the circuit court of Marion County confirmed both decisions.

On appeal, claimants argue that the Commission erred in determining that the 50% of their pay designated by Henderson as a reimbursement for travel expenses did not constitute compensable income under the Act. Specifically, claimants contend that the per diem allowance was not and did not constitute a reimbursement for any actual travel expenses, but Henderson merely designated half of their pay as a reimbursement for travel expenses in order to reduce the amount of State and Federal withholdings and workers' compensation benefits it had to pay.

Section 10 of the Act provides in pertinent part:

"The compensation shall be computed on the basis of the `Average weekly wage' which shall mean the actual earnings of the employee in the employment in which he was working at the time of the injury during the period of 52 weeks ending with the last day of the employee's last full pay period immediately preceding the date of injury, illness[,] or disablement[,] excluding overtime[] and bonus[,] divided by 52." 820 ILCS 305/10 (West 1992).

The average weekly wage includes "anything of value received as consideration for the work, as, for example, tips, bonuses, commissions[,] and room and board." 5 Larson, Larson's Workers' Compensation §60-12(a), at 10-648 through 10-655 (1993). The question of whether a travel expense reimbursement should be considered when calculating the average weekly wage appears to be one of first impression in Illinois. It has, however, been addressed in numerous other jurisdictions.

In Ernie Baylog, Inc. v. Industrial Claim Appeals Office of State of Colorado, 923 P.2d 361 (Colo. App. 1996), the claimant, Sally Olney, was an over-the-road truck driver. She was paid eight cents per mile as wages and an additional four cents per mile to cover all personal expenses incurred while driving, such as meals, showers, and an occasional motel room. Her employer deducted income taxes and social security taxes from the eight cents per mile designated as wages, but not from the four cents per mile paid to cover personal expenses. The court in Ernie Baylog, Inc. held that the four-cent-per-mile payment should not be included in Olney's weekly wage. The court based this conclusion on statutory provisions which provided that a per diem payment was not considered "wages" for purposes of computing workers' compensation benefits unless it is also considered "wages" for Federal income tax purposes.

In McGinnis v. Metro Package Courier, Inc., 5 Neb. App. 538, 561 N.W.2d 587 (1997), the claimant, DeLoris McGinnis, was a courier for Metro Package Courier, Inc. (Metro). She used her own vehicle to make deliveries. She was given two paychecks, one for salary and one for "mileage reimbursement." The court in McGinnis held that McGinnis's paycheck for "mileage reimbursement" should be included in the calculation of her average weekly wage. The court reasoned that the evidence demonstrated that Metro was not actually reimbursing McGinnis for her car expenses, because her mileage reimbursement check did not necessarily correspond to the miles she reported to Metro. The court concluded that Metro had labeled a majority of its drivers' pay as "mileage reimbursement", rather than salary, in order to maximize tax benefits for both parties.

In Scyphers v. H & H Lumber, 237 Mont. 424, 774 P.2d 393 (1989), the claimant was a long-haul truck driver. He was paid 14 cents per mile plus 3 cents per mile per diem. Drivers were not reimbursed for meals and lodging and were not required to turn in expense reports. Taxes were withheld from the 14-cent-per-mile payment, but not from the 3-cent-per-mile per diem, and it was paid by separate check. Following several other jurisdictions, the court held that 3 cents per mile paid to a truck driver as "per diem" compensation should be included in his wages for the purpose of determining workers' compensation benefits, because such compensation was not an actual reimbursement for out-of-pocket expenses but, rather, constituted real economic gain to the driver.

In Ridgway v. Board of Ford County Commissioners, 12 Kan. App. 2d 441, 748 P.2d 891 (1987), claimant was a process server for the sheriff's department. He used his own car, for which the county paid him $225 per month pursuant to a leasing agreement. The court held that an employee's car allowance should be included in the calculation of his average weekly wage because the evidence demonstrated that the allowance ...

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