Opinion ID: 1696996
Heading Depth: 2
Heading Rank: 2

Heading: Alcozer is an employee under the Workers' Compensation Act

Text: When we review factual findings of a compensation judge, we will not disturb the findings unless they are manifestly contrary to the evidence presented. Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 60 (Minn.1984). However, if the controlling facts are not in dispute, the determination of whether a person is an employee is a question of law. Oelrich v. Schlagels, Inc., 426 N.W.2d 430, 433 (Minn.1988). Questions of law are reviewed de novo. Kliniski v. Southdale Manor, Inc., 518 N.W.2d 7, 9 (Minn.1994). Here, the controlling facts are not in dispute. The Workers' Compensation Act defines an employee as any person who performs services for another for hire   . Minn.Stat. § 176.011, subd. 9 (2000). [4] The definition includes a list of persons who are included as employees under the Act. Id. A voluntary uncompensated worker participating in a program established by a local social services agency is one such person. Id., subd. 9(10). Alcozer asserts that at the time of his injury, he was either an employeeperforming a service for hireor he was a voluntary uncompensated worker. The plain language of the Act and relevant case law support the conclusion that Alcozer is an employee under the Act. More specifically, the Act defines an employee as one who performs services for hire and Alcozer meets the three indicia of a contract for hire. First, Alcozer performed his labor in exchange for something because his receipt of public assistance is a function of his labor and Alcozer's labor is mandatory under the statute. Second, Alcozer was paid for his work within the meaning of the Act because he received public assistance, indicating that his work was not gratuitous. A person need not receive wages as compensation for labor to be an employee. Third, Alcozer voluntarily chose to work within the meaning of the Act. The fact that he would forego public assistance if he discontinued working does not make his labor compulsory because in all fields, one must work to receive compensation. Under the law of workers' compensation, a contract of hire is a requisite element of an employment relationship, indicating that labor is being performed in exchange for something of value and not gratuitously. Miller v. Federated Mut. Ins. Co., 264 N.W.2d 631, 635 (Minn.1978). A laborer whose receipt of payment is dependent on and in proportion to his or her labor should be considered an employee. 3 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 64.04 (2000). Compensation is often denied to a worker receiving public assistance on the theory that such a person would continue to receive the same assistance whether working or not and is therefore not an employee. Id. Nevertheless, a CWEP worker's receipt of public assistance is dependent on and in proportion to his labor. Work requirements under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and the Minnesota Family Investment Program of 1997 (MFIP) are mandatory, and failure to comply with work participation requirements results in either a pro rata reduction in the amount of assistance or termination of benefits. 42 U.S.C. § 607(e)(1) (Supp. V 1999); Minn.Stat. § 256J.55, subd. 1(c) (2000). Further, there is a 5-year lifetime limit on the receipt of assistance. 42 U.S.C. § 608(a)(7) (Supp. V 1999); Minn.Stat. § 256J.42 (2000). [5] The federal legislation authorizing the CWEP program put in place in Minnesota, as well as the state legislation continuing the program, are related to compensation at an hourly wage rate. The law limits the number of hours that a CWEP worker may work to the quotient of the applicable benefit rate divided by the federal or applicable state minimum wage rate. 42 U.S.C. § 682(f)(1)(B)(i) (repealed 1996); Minn.Stat. § 256J.67, subd. 4(d). After a CWEP worker has been assigned to a position for 9 months, the maximum number of hours are limited to the MFIP standard of need divided by the rate of pay for individuals employed in the same or similar occupations by the same employer at the same site. Minn.Stat. § 256J.67, subd. 4(d); accord 42 U.S.C. § 682(f)(1)(B)(ii) (repealed 1996) (using a similar calculation). While these provisions help to avoid displacement of regular public workers, [t]hese provisions, in effect, recognize[] that if the provision of public assistance justifie[s] the imposition of a work requirement, the extent of that requirement should be premised on the amount of assistance provided. Matthew Diller, Working Without a Job: The Social Messages of the New Workfare, 9 Stan. L. & Pol'y Rev. 19, 22 (1998). To satisfy the workers' compensation employee requirement that there is a contract of hire, there must be an element of payment. Under our previous case law, we have concluded that payment need not be pecuniary compensation if, in consideration of services, the employe [sic] receives from the employer any services, goods, or accommodations of substantial financial value such as farm work, fuel, heat, light, clothing, board, lodging, laundry, or tuition. Aleckson v. Kennedy Motor Sales Co., 238 Minn. 110, 116, 55 N.W.2d 696, 700 (1952) (involving the use of a car as compensation for services); accord Oelrich, 426 N.W.2d at 433 (involving on-the-job training as compensation); Krause v. Trustees of Hamline Univ., 243 Minn. 416, 419, 68 N.W.2d 124, 126 (1955) (involving room and board as compensation); Judd v. Sanatorium Comm'n, 227 Minn. 303, 307-08, 35 N.W.2d 430, 433-34 (1948) (involving room and board as compensation). Further, the fact that a workfare worker receives public assistance instead of wages does not mean that his or her labor is gratuitous. Cristello v. Township of Irondale, 195 Minn. 264, 265, 262 N.W. 632, 633 (1935) (stating that right to compensation not lost because worker was, at the time of injury, working out poor relief). Simply put, a workfare worker performs services in order to receive public assistance. A contract of hire also involves a voluntary choice of working. See 3 Larson & Larson, supra § 64.03. The fact that a workfare worker will forego relief if he discontinues working does not make his employment compulsory. In all fields of endeavor[,] work is a condition precedent to remuneration. County of Los Angeles v. Workers' Comp. Appeals Bd., 30 Cal.3d 391, 179 Cal.Rptr. 214, 637 P.2d 681, 685 n. 4 (1981) (quoting Thelma Brook & Harold M. Simon, Comment, Relief Workers and Workmen's Compensation, 36 Ill. L.Rev. of Nw. U. 773, 776 (1942)). [6] Moreover, federal employment statutes treat Alcozer as an employee. It is undisputed that federal legislation and corresponding regulations implementing CWEP attempt to make it clear that workfare placements are not jobs. See, e.g., 42 U.S.C. § 682(f)(1)(C) (repealed 1996). But federal regulations in place at the time CWEP was implemented in Minnesota required workers' compensation coverage or comparable protection. 45 C.F.R. § 251.2(b) (1995). The PRWORA of 1996 is silent on the issue, although the Department of Labor's position is that workfare workers are still considered employees for purposes of federal employment laws. U.S. Department of Labor, Department of Labor Guidance: How Workplace Laws Apply to Welfare Recipients, Daily Lab. Rep. (BNA) No. 103, at E 3 (May 29, 1997). Thus, even though the CWEP legislation and regulations attempt to classify workfare placements as something other than a job, workfare workers are considered employees for purposes of federal employment statutes. They should, therefore, be considered employees for purposes of state employment laws. Given that PRWORA and MFIP require public assistance recipients to work in exchange for their public assistance payments and place a 5-year lifetime limit on such assistance, workfare participants are essentially in the same position as other workers doing similar work for purposes of receiving workers' compensation. Therefore, I conclude that workfare participants are employees under the Workers' Compensation Act and are entitled to protection under the Act.
Because workfare workers are similarly situated to regular workers, it is both logical and consistent with the purposes of the Act to include these workers under the Act's protective umbrella. Workers' compensation is social legislation, providing a measure of security to workers injured on the job, with the burden of that expense considered a proportionate part of the cost of production. Franke v. Fabcon, Inc., 509 N.W.2d 373, 376 (Minn.1993). The whole scheme is one of reciprocal concessions by the employer and employee. Lambertson v. Cincinnati Corp., 312 Minn. 114, 120-21, 257 N.W.2d 679, 684 (1977). An injured employee is guaranteed compensation from his or her employer for work-related injuries regardless of the employee's fault or the employer's lack of fault, in exchange for forfeiting the right to sue the employer in tort. Minn. Brewing Co. v. Egan & Sons Co., 574 N.W.2d 54, 58 (1998) (citing Lambertson, 312 Minn. at 120-21, 257 N.W.2d at 684). In most other circumstances, the employee retains his or her common law right to recover in tort from a negligent third party. Minn. Brewing, 574 N.W.2d at 58. Workers' compensation provides support for workers disabled by compensable injuries during periods of actual disability and for their dependents in the event of a work-related death, together with hospital, medical, and funeral expenses. If the injury left the worker with some permanent bodily impairment, compensation for that impairment has been allowed regardless whether the worker sustained a reduction in wages. O'Mara v. State, Univ. of Minn., 501 N.W.2d 603, 606 (Minn.1993) (citations omitted). Liability on the part of an employer or the insurer for disability of a temporary total, temporary partial, and permanent total nature shall be considered as a continuing product and part of the employee's inability to earn or reduction in earning capacity due to injury or occupational disease and compensation is payable accordingly, subject to section 176.101. Minn.Stat. § 176.021, subd. 3 (2000). With the exception of bodily impairment and medical payments, practically all benefits under workers' compensation are calculated as a percentage of the employee's average weekly wage. The object of this wage determination is to arrive at a fair approximation of [the employee's] probable future earning power which has been impaired or destroyed because of the injury. Knotz v. Viking Carpet, 361 N.W.2d 872, 874 (1985) (quoting Sawczuk v. Special Sch. Dist. No. 1, 312 N.W.2d 435, 437-38 (Minn.1981) (alteration in original) (citations omitted)). When evidence of an employee's past performance does not exist, an employee's probable productive capacity may be gauged by the wages paid to one doing similar work. Berry v. Walker Roofing Co., 473 N.W.2d 312, 315 (Minn.1991) (citing Johnson v. D.B. Rosenblatt, Inc., 265 Minn. 427, 429, 122 N.W.2d 31, 33 (1963)). The PRWORA and MFIP are predicated on the assumption that workfare workers can and should be required to work in exchange for their benefits. Diller, supra at 19. Given this presumption of a probable productive capacity, there is absolutely no justification for denying workfare workers compensation for any future earning power that is impaired or destroyed because of an injury that is causally related to the workfare work. Indeed, it is inconsistent with the purpose of the Act to treat workfare workers differently when they are required to work in exchange for their benefits and their future earning power can be impaired or destroyed due to a workplace injury. This is especially troublesome in light of the fact that workfare workers are in more need of protection than regular workers due to their lack of mobility and low bargaining power. See Vadim Mahmoudov, Are Workfare Participants Employees?: Legal Issues Presented by a Two-Tiered Labor Force, 1998 Ann. Surv. Am. L. 349, 385 (1998).
To support their position that Alcozer is not an employee under the Act, respondents assert that workfare workers in Minnesota have comparable protection for workplace injuries under the Injury Protection Program (IPP). In reaching its holding, the majority apparently has agreed with respondents' position. [7] When Minnesota put its CWEP program in place, federal regulations required that CWEP workers not covered by workers' compensation be provided with medical and accident protection for on-site injury at the same level and to the same extent as that required under the applicable State's workers' compensation statute for covered employment. 45 C.F.R. § 251.2(b) (1995). In response, the Minnesota legislature enacted the IPP. Act of May 18, 1995, ch. 178, art. 2, § 18, 1995 Minn. Laws 630-32 (now codified at Minn.Stat. § 256J.68 (2000)). [8] Benefits provided under the IPP are limited to reimbursement for reasonable medical expenses and permanent partial disability    in like amounts as allowed in section 176.101, subdivision 2a. Minn.Stat. § 256J.68, subd. 6. Compensation for injuries resulting in death are payable to a CWEP worker's estate up to $200,000. Id. No compensation is allowed for pain and suffering, wage loss, or any other benefits allowed under the workers' compensation law. Id. All payments made under the IPP are to be reduced by any proceeds received by the claimant from any insurance policy covering the loss, with the exception of payments made under the state's medical assistance or general assistance programs. Id. To conclude, as the majority apparently has done, that the IPP provides benefits comparable to workers' compensation is disingenuous at best. The fundamental component of workers' compensation coverage is the wage loss benefit, a benefit expressly excluded by the IPP. Workers' compensation wage loss benefits are calculated on a wage basis that approximates impaired earning power. Minn.Stat. § 176.101, subds. 1, 2, 4 (2000). For workers without a sufficient wage history, wages from those similarly employed may be used. See Berry, 473 N.W.2d at 315. Now, in light of the 5 year lifetime limit on MFIP, an injured workfare worker is in need of the same income maintenance protection as a regular employee covered by workers' compensation. Further, even though the IPP provides compensation for permanent partial disability, permanent partial disability is compensation for functional loss and not compensation for loss of earning capacity. See O'Mara, 501 N.W.2d at 606; Gasper v. Northern Star Co., 422 N.W.2d 727, 731 (Minn.1988). [9]
The majority's conclusion that workfare workers must rely exclusively on IPP's significantly inferior coverage is not only inconsistent with federal law, it is also a conclusion that is directly at odds with the plain meaning of IPP's exclusive remedy provision. It is undisputed that under the exclusive remedy provision of the IPP, the state and its political subdivisions are not subject to suit by a CWEP participant. Minn.Stat. § 256J.68, subd. 7. However, the question in this case is whether, under the CWEP contract, the Food Bank is a political subdivision for purposes of the exclusive remedy provision. Chapter 256J does not define the term political subdivision. Elsewhere in the Minnesota Statutes, a political subdivision is defined as a county, a statutory or home rule charter city, a town, a school district, or other political subdivision of the state. E.g., Minn.Stat. § 465.719, subd. 1(a) (2000). [10] In a few sections, the definition also includes agencies of the political subdivision, but in those sections the applicability of the definition is limited to the specific function of the particular chapter. E.g., Minn.Stat. § 162.02, subd. 3a (an agency of a political subdivision which has jurisdiction over parks); Minn.Stat. § 471.49, subd. 3 (any agency or unit    authorized to levy taxes or empowered to cause taxes to be levied). Thus, both the plain language of Minn.Stat. § 256J.68, subd. 7, and other statutes indicate that the IPP exclusive remedy clause does not bar a suit against a subcontractor of a political subdivision. When the language of a statute is not ambiguous, we will give effect to the plain meaning of the words. See Frank's Nursery Sales, Inc. v. City of Roseville, 295 N.W.2d 604, 608 (Minn.1980). [11] Despite the plain language of the statute, the majority concludes that the legislature intended that the IPP be the exclusive remedy for CWEP participants and that allowing a CWEP participant to assert a workers' compensation or common law claim against a nonprofit organization would undermine this intent. Respondents asserted the same argument, but this argument is not persuasive. Had the legislature intended the result respondents seek and the majority reaches, it could have written the IPP exclusive remedy provision such that it would apply to any employer under the Act as it did in the workers' compensation statute. See Minn.Stat. § 176.031 (2000). The legislature also could have included subcontractors of the state in the IPP exclusive remedy clause. Respondents also assert that there is a strong public policy reason for concluding that the Food Bank is a political subdivision, because nonprofit organizations like the Food Bank will not participate in the CWEP program if they are liable for workers' compensation for the participants. It is important to note, though, that the Food Bank has asserted that its contract with the CWEP program provides that CWEP will be responsible for Workers' Compensation. The impact of the contract is not before the court, but if the Food Bank is required to provide workers' compensation benefits to Alcozer, it could possibly assert a claim against the CWEP program for those costs, thereby negating any disincentive to participate in the CWEP program. I cannot ignore the plain language of the statute in order to satisfy a competing policy objective. See Frank's Nursery Sales, 295 N.W.2d at 608-09. Given that IPP's remedy provision does not bar workers' compensation coverage for workfare workers, the majority's conclusion that IPP is the workfare worker's exclusive remedy conflicts with the plain meaning of the IPP statute and, in doing so, unnecessarily creates a conflict with the federal mandate that workfare workers receive the same coverage as regular workers. Therefore, I conclude that the plain language of Minn.Stat. § 256J .68, subd. 7, provides that the Food Bank is not immune from suit for injuries to CWEP participants while working at the Food Bank as part of CWEP. I would conclude that Alcozer as a workfare worker at the Food Bank was in the same position as other employees. Accordingly, I would hold that Alcozer is an employee under the Workers' Compensation Act and is entitled to the protection guaranteed to employees covered by the Act.