twenty nine u s c section two hundred seventy two quote reasonable payments for traveling expenses or other expenses incurred by an employee in furtherance of his employer's interests and properly reimbursable by the the court will see that he was paid thirty nine dollars in gross earnings for the work week and appendix fourteen thirty two you can see that work calculated him to have worked thirty seven point two five hours those are warner's own business records you know you limit your argument here to payment of travel expenses right travelling expenses and other or other expenses a lot of you no know travel expenses not if if it's for other things beyond expenses incurred by individuals who are traveling and away from home overnight and in fact every court to ever consider militancy don't spence's in the context of employees who are required to be away from home overnight has found that where those payments are reasonable and disproportionately large they are excluded from the regular rate but if the stipend that is paid is for services rendered and not for travel expenses mileage rate that is a political to the over the road drivers who passed the training program i do is a voluntary program so i had an option your client's an option to receive straight wages versus the program the entered as a right they provide to the drivers not just in the taxable form in the total form they reduce the rates they pay to the drivers and then provide them exchange for that reduction a reimbursement for their expenses and so if you add the two together it's more than the wage amount now it's less less it's less so for example i think this is in the district court's opinion you might have twenty seven cents per mile if you're not in the program and then your total of the reimbursement and the non remembers might be twenty don't get paid enough wages where ours it's not it's not quite as simple because the reality is what we know from the discovery in this case is that warner did research and determine the drivers were incurring because they were of the road approximately fifty nine to sixty five dollars per day in deductible business expenses we know that and it's very interesting that this is the question coming from your honor because this was initially the i r s is concerned so one of our own gets audit on this program and i know both sides  and they said because the amounts look similar it must mean that you're paying these expenses and they're not they're not they're not they're not reimbursable under the iris code and worse position taken under oath at appendix one twenty three is that that's a false test and it's a red herring and it is in this case too because the gross income eligible drivers perceive that warner pieces that were hires them to perform and says regardless of whether the driver elects to participate in the program quote contemplates and accounts for the deductible and nondeductible business expenses the taxpayer recently expects eligible drivers will incur so what the discovery in this case reveal in fact is that the amounts warner  contemplated for these expenses as they would have had to because these drivers were actually incurring based on the evidence approximately sixty dollars per day in these expenses counsel and under what was occurring if you were a regular driver not a trainee you're being paid a certain amount per mile so i correct and if you were away for days and therefore with travelling expenses did those drivers get reimbursed for those travelling expenses or was that included in what they were compensated on a permanent basis the ones who were in the plant no the ones who were just there to lie and drivers just the regular full time drivers right how were or were they compensated for travelling expenses well according to warner on they were provided mileage rate which contemplated and accounted for those expenses so it was included in the mileage rate it was included in the rate so when they start the program with trainees rather than including it in the rate they have a different way of compensating them for those expenses that's right for the trainees they paid a per day rate to the trainees was i think buried in the class for twin forty one and forty eight dollars per day for each day they were required to be away from home e mails over the road on the for the they paid out of per day and that not a mileage no no the regular drivers were they taxed on the income that they received that included their travelling expenses had they not opted into the program that would have been subject to taxation but but they could have declared it as a business expense your rent that was up to the driver though it was in the driver's effort to do this could under the trainee program if they elected to accept the pr correct if if you opt in for the one program you could stand a motel and eat restaurant food and so forth if were on the other program you decided to sleep in the truck and eat more modestly and so forth you pocketed that difference is that right that is true the under the regulatory language  by the dia well though we know that one a reasonable proxy me this is under two hundred seventy three reasonable are actual expenses that are reimbursed by an employer are not part of the regular rate we cite the court to a decision a mining services where the court held the court was dealing with a situation where an employee claimed essentially has paid a per diem was living away from home he claimed to be especially frugal because he was frugally claimed that his predicament not was disproportionately large this was a normal type of the fellas a case where the employee was challenging the perdiem not the employer trying to escape its own categorization of the payment he was trying to increases over time rate so he wanted to produce them to be put into his regular rate which is generally how these cases play out this really is an exception to the role and in that case the court review didn't refuse to review on a side by side accounting of the employee's actual expenses and the expenses that were reasonable the reason was because of the policy problems of allowing employees which the f l state does the ability to perspectively provide these reimbursable expenses only then to get sued later because somebody either ate ramen noodles every day or slept on an air mattress instead of getting a hotel and the court there said it was reasonable yardstick could imagine to determine whether these payments were reasonable or the irises own guidelines to determine what a reasonable expense reimbursement would be and it's also important to note and this gets to that this is actually this panel and am trust held that where you make statements to the iris and they rely on those there is quasi judicial stoppel it then becomes an issue which the defendant is bound to at appendix twenty one await were told the i r s quote iris finds in overturning the iris initial iris decision the iris found the taxpayer this is a quote and said eighteen twenty nine the taxpayer doesn't routinely pay reimbursement allowances to employees who have not incurred bonafide busy expenses only actually incurred expenses are involved the reimbursement of those the war defense warner puts in here is the polar opposite of every statement they told the i r s under oath that these were these reimbursement these drivers one current because of their business with warner and the statutory language of the f l say again a reasonable payment for traveling expenses incurred by an employee in his in for it in furtherance of the employer's interest and properly reimbursable by the employer we know they're properly reimbursable because the iris found them to be we know that they were expenses incurred by the employee because the entire factual record makes clear that the words own business records in fact made clear that the that these payments were for traveling good afternoon your honour's joe johns on behalf of warner enterprises and we're asking this court to a perm the summary judgment entered by judge smith camp in this case this claim was brought on behalf of a class of over fifty two thousand learner drivers who  to participate in werner's optional pretty and plan and they did that because they could take advantage of certain tax benefits offered by the i r s for accountable plans that allowed them more take home pay more pay in their pockets and now they claim that in addition to that that those payments those pretty in payment should be should not be considered as wages and as a result they weren't paid minimum wage so that the issue in this case is what is the true purpose of the per team payments that were made is the true purpose to paper work performed or was the true purpose to reimburse brick spence's incurred i thought what about this problem that the company told the r s the true purpose was and that's was that was the one of the methods that the plaintiffs offered to try and prove the issue in this case that these are pretty and pain which recently approximate actual expenses what judge smith camp did in addressing that was to say provisional stoppel to occur there have to be inconsistent statements and the judge ruled there were not inconsistent statements first of all because the so that part of the difference is that under the i r s accountable plan rules it's a reasonable approximation of what the company expects the drivers may incur what they actually incur the core you're saying that the company told the r s we reasonably expect that there will incur this amount of expenses but now you're saying they didn't actually incur that  you're now are stopped from going to the i r s and saying we reasonably expect these expenses in the future because you're now saying in this case it didn't turn out the way we reasonably expected no i think the standards are different our expectations may or may not be the same now as they were in two thousand and three when we put together the plan but the basis for warner's expectation was their discussions with three drivers and one manager and they presented information based on hearsay as judgments can pointed out hearsay discussions from with three drivers and one manager and the i r s accepted that as a reasonable approximation of what's expected for purposes of the i r s we get to federal court we have the rules of evidence and a whole different burden under a different standard that the plaintiffs must meet here so one there is a cafeteria plan we get the people get the advantage of certain tax benefits that the i r s creates under a very specific set of rules and those very specific set of rules that are present here under the accountable planned rules and regulations are different than what's under the apple less say so we only get this benefit or these drivers only receive this benefit because the i r s creates this framework that's very specific to accountable plans so how is it much of a benefit to a driver if the amount they're getting paid includes what they could also be expected to receive in terms of the reimburs costs and that somehow taken away from their wages it looks like they're getting paid but in essence included in their pay is what they are going to have in expenses that could have been sought as reimbursement well they instead of as wages there's an issue out there that isn't part of this case and that's about whether scuse me go ahead i'm sorry not to jump ahead of you but go ahead it's my stick with the microphone if you would it's easier to hear if your back and forth you can hear is well sorry the issue in this case is not whether travel expenses incurred over the road truck drivers are deductible or taxable or properly reimbursable that's not the issue here the issue here is whether the pretty i'm paying months should be included in wages and the court correctly ruled that they shouldn't be because you have to look at the characteristics of those payments to determine whether those characteristics indicate that the true purpose of the pretty in payments was to compensate for work performed and all of the characteristics  made for work performed and that's what you have to look to and the courts have told us and there's guidance from the department of labor that tells us whether this these payments are payments for work performed what the department of labor has told us in this very specific instance of what they're pretty and payments with out so there's a semi colon that seems to after that after which it seems like we're talking about something payments made for occasional  period and gives those that description through the remainder of that clause and stops with or similar cause and then it seems to have a nother kind of thing reasonable payments for travelling expenses or other expenses incurred by an employee in the further furtherance of his employer's interests and properly reimbursable by the employer or other similar payments to an employee so that  again what i'd say to this is that this court addressed the issue of interpretation of twenty nine u s c two zero seven easy and said that the issue is whether the payments are made for work or not and it says that at the top of it in the body of two zero seventy it talks about if if you're sleeping the night that's not for work you have to look at what the purpose of the payment is not what the drivers are doing but was the per diem payment made for the purpose of compensating them or was it made for something else and today it seems like the f s o as the wage and hour rules are saying if you're giving them money for reimbursable expenses that's not wages that's not what they're saying what this court has said in the act and case is that if the payment is poor compensation for work perform then it's not payment as a reimbursable expense and it must be included in the regular rate ok so how do you decide whether it's payment for performance based on how it's calculated this case you know the judge got into whether was done by the mileage yes there's a variety of factors and characteristics that courts look at to determine whether the payment was compensation for work versus a true expansions travel expense one of the things they look the guidance provided by the department of labor in the field operations handbook that says if the payment if the part in it it's specific to pretty in payments this very issue department of labor has said that if the perdiem payment is based on the amount of work performed and thus the total amount of the party i'm paid is varies with the amount of work performed then that's a wage here it's a way and if the if the driver incurs some what we would normally call travel expenses while he's earning that wage then what disease what does he do about that he can deduct wages beyond i think when you're part of the party in program you have to work within the party and program and if you have to got double travel expenses in addition or in excess of the perdiem amount then those may also be deductible what's slightly different here is it's not a dollar for dollar deal here with the previous program allows is not only is it nontaxable income but it's also it's not subject to employment tax so there's no fica taken out of it either so when counsel says that or they can do it at the end of the year the people who don't participate in the program can just deduct him at the end the year it's not the same benefit the benefit the higher s offers here under the accountable plan is greater than that because for the meals out of his of his wages yes unless it goes over a certain amount you're saying many might be able to deduct the new year yes ok and that the what what happens in reality is that truckers like all of us have different eating habits and also different ways of providing for themselves when they're over the road in terms of having a cooler and putting sandwiches in it or various ways of providing so what would judge me may incur over the road driving may be a whole different expense than what judge politan may incur over the road and so when you get to this wage an hour context it has to be actual and has to be reasonable and what the cour is that because under the epilepsy say they use the term employee and the expenses must reasonably approximate what's incurred which mean actually incurred and for each employee both the apple us a statute and the regulations under the statute both use the term employee and employees defined in the epilepsy to be an individual so the berry case in the pit circuit the pickton case of the eastern district of texas both of said you can't do that on a on a group basis so not only did the court properly find here that there was no dispute as to the characteristics of these payments all the characteristics indicate it was a wage when you look at the way the way the amount of the preempt if you look at the total amount twenty seven cents a person is twenty eight cents it's about the same whether you're in or out so that's an indication that perdiem to it that that's that's an occasion that it's a wage if you look at whether ok let's take the the wage rate separate from the perdiem amount so in the example  seventeen cents a mile and so the pit circuit in one of the cases and gag case talked about is it reasonable that a truck driver here would go to work for seventeen cents a mile and the answer is no why would he do that when he can get the regular rate at twenty eight cents a mile and so when you look at those factors you've got at that that's an indication that the pretty i'm rate is part of the compensation because when you had the pretty young rate to the regular rate the ten cents in the seventeenth cent you get to twenty seven cents and that's that's generally what truckers are paid the other characteristics are that it's paid in the same paycheck there is no requirements here that they don't have to submit receipts or anything else yet when they have actual expenses that need to be reimbursed such as tolls from toll roads or scale tickets or things like that they have to submit receipts and they are reimburse the specific amount on those receipts separate from the separate totally s and that those payments are expense reimbursements not included in the wage and both both categories are paid by the mile right yes with the exception of the trainees are the student drivers and the student drivers are paid just generally speaking whether they're in the plan or not student drivers are paid by the day and then there's a true up to make sure they're they're paid minimum wage if they have so many on duty hours and because they're paid that way regularly that's also how the pretty i'm with set up they're paid a lump sum rather than by the mile but other than that for the trainees all the characteristics of the payments are the same and they all the nikkei as a matter of law if i'm in the the category that you're talking about and i ate my lunch while i'm still driving i'm being paid by the mile so that's more money in my pocket down the road in their right yes yes alternately there is more money if you put a look at the drivers elect to participate in the pretty and program sure there is more take home pay for them now you say they're paid a flat some ok and because that's how they're paid generally that's also how the pregame was set up so it's it that that payment the premium payment for trainees is not by the mile they're paid the same way they are paid their regular wages which is by the day well that is a cut against counting it as a wage if it's by the day it doesn't hear one because there isn't the countervailing  regulation a rule or guidance that says there is the guidance that says if they're paid by the hour that indicated it's a wage there isn't the countervailing that says if it isn't then it must be an expense so what you look to are all the characteristics of the payment that all indicate here that it was a wage you look at the amounts the requirements no receipt all those things that the court went through that courts around the country have gone through to establish whether it's a wage or not because some of the cases that we're dealing with aren't under an accountable plan they're just a program that that companies have set up and so there are the pretty young guidance from the department of labor in the field operation handbook may or may not be a political but here all the characteristics indicate that they were wages not true reimbursements for expenses incurred thank you mr jones thank you your honors thank you this court in acton stated under two hundred seven we consider only two factors quote first we must determine whether your car was sickly buybacks there but whether the payments at issue constitute remuneration for employment and if so then we must determine whether those payments are excluded nonetheless i want to more of a star story exclusions the test the court performed perhaps gets to the first question it doesn't get to whether it qualifies under two or seven each to as an expense reimbursement it's also worth noting that the district court in this case review cases which are very different because in this case of the employees are the ones who are standing by the employer's representations of what these payments were the employees certainly should be allowed to rely on that evidence in court even if even if warner is not bound to those statements which because they were submitted under oath to the i r s they are but even if they are not they still constitute evidence to allow fact finder to determin the purpose of these payments we heard warner get up and say that these pain the purpose of these payments was for compensation but according to what were explained to the drivers which is what specifically does and that's not appendix eleven forty specifically told the drivers that these payments were quote intended to cover your meals and incidental expenses while you were away from home and quote that's in their handbook explain those we know they admitted in a rule thirty six admission quote the nontaxable portion which is the per diem payment approximates the expenses that warner reasonably expects an employer will incur while way from home on business we know they told the i r s at appendix eighty seven seven that the reasonableness of these payments be evaluated each calendar year and that if they were determined to not be reasonable they would be changed throughout each year warner increased the per diem amounts as the i r s allowed them to demonstrate that they continually told the iraqis are reasonable payments not just prospectively but also retro retrospectively were is trying to have it both ways here make no mistake about it and it does not help the drivers for example when they report the income of drivers to the nebraska unemployment compensation boards which determine benefits to separated drivers they didn't include the per diem amounts as compensation even though the stashing nebraska says that all amounts paid for remuneration for services should be included in that situation the per diem payments were not remuneration for services they were expenses paid for travelling expenses the undisputed factual record shows these will these these payments squarely fit under section two hundred seventy two we respectfully request this court to reverse the district court find that the payments made pursuant to the