Court Opinion

ID: 2817704
Source: CourtListenerOpinion
Date Created: 2015-07-16 14:51:04.675586+00
Date Added: 2024-06-11T12:23:41.068300
License: Public Domain

RENDERED: JUNE 11, 2015
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JOSEPH JEWELL                                                        APPELLANT

                 ON APPEAL FROM COURT OF APPEALS
V.                   CASE NO. 2013-CA-000850-WC
            WORKERS' COMPENSATION BOARD NO. 11-WC-00091

FORD MOTOR COMPANY;                                                  APPELLEES
HONORABLE JOHN B. COLEMAN,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS' COMPENSATION BOARD

               OPINION OF THE COURT BY JUSTICE KELLER

                                  AFFIRMING

      Joseph Jewell (Jewell) appeals from the opinion of the Court of Appeals

holding that the administrative law judge (the ALJ) correctly excluded

unemployment compensation benefits when calculating Jewell's average weekly

wage (AWW). Having reviewed the record and the arguments of the parties, we

affirm.

                               I. BACKGROUND.

      Jewell suffered a work-related injury on December 4, 2009, for which he

timely filed a claim. Based on the evidence, the ALLI determined that: Jewell

had an AWW of $968.20; he suffered a period of temporary total disability,

entitling him to benefits at the rate of $645.47 per week; and he has a 5.95%

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permanent partial disability rating, entitling him to benefits at the rate of

$30.98 per week. The only issue before us is whether the ALJ appropriately

excluded unemployment compensation benefits when he calculated Jewell's

AWW. Therefore, we only set forth in detail the facts related to that issue.

       During layoff periods, Ford completes the necessary paperwork for its

employees to receive unemployment compensation benefits. After an employee

begins receiving unemployment compensation benefits, Ford makes

supplemental or "sub-pay" payments sufficient to increase the amount the

employee receives while laid off to 95% of his or her base pay rate.

       Kentucky Revised Statute (KRS) 342.140(1)(d) provides that an hourly

employee's average weekly wage is based on his or her earnings during the

highest quarter in the fifty-two week period preceding the injury. Based on the

AWW form supplied by Ford, Jewell's highest quarter was the thirteen-week

period immediately preceding the injury. That quarter included one week when

Jewell was laid off from work.' When calculating Jewell's AWW, Ford added a

zero for the lay-off week resulting in an average weekly wage of $937.43.

Jewell, on the other hand, added $400.00 in sub-pay and $373.00 in

unemployment compensation benefits for that week, resulting in an average

weekly wage of $996.89. The ALJ found that sub-pay should be included in

the AWW calculation but that unemployment compensation benefits should

       I In the first, second, and third quarters, Jewell was laid off for nine weeks,
eight weeks, and five weeks respectively, resulting in lower total wages for those
quarters.

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not. Thus, the ALJ added $400.00 in sub-pay for the lay-off week and

determined that Jewell's AWW was $968.20.

      Both parties appealed to the Workers' Compensation Board (the Board),

which affirmed the ALJ's finding that unemployment benefits should not be

included in the AWW calculation. However, the Board reversed the ALJ's

finding that sub-pay should be included. Jewell appealed to the Court of

Appeals, which reversed the Board's finding regarding sub-pay but affirmed the

Board's finding regarding unemployment benefits. Jewell then appealed to this

Court arguing that unemployment benefits should be included in the AWW

calculation. Ford is not contesting the inclusion of sub-pay in that calculation;

therefore, we do not address the appropriateness of its inclusion. For the

following reasons, we disagree with Jewell and affirm the Court of Appeals's

decision.

                          II. STANDARD OF REVIEW.

      The issue presented is one of statutory interpretation, which we review

de novo. Saint Joseph Hosp. v. Frye, 415 S.W.3d 631, 632 (Ky. 2013).

      We presume when interpreting a statute that the legislature
      intended for it to mean exactly what it says. Although ambiguous
      language must be interpreted based on legislative purpose and
      intent, unambiguous language requires no interpretation.

Chrysalis House, Inc. v. Tackett, 283 S.W.3d 671 (Ky. 2009). Furthermore, we

presume that the General Assembly intended for a statute to be construed as a

whole, and for all of its parts to have meaning. Hall v. Hospitality Resources,

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Inc., 276 S.W.3d 775 (Ky. 2008); Lewis v. Jackson Energy Cooperative

Corporation, 189 S.W.3d 87 (Ky. 2005).

                                    III. ANALYSIS.

      "Wages" are "money payments for services rendered, [and] the reasonable

value of board, rent, housing, lodging, and fuel or similar advantage received

from the employer, and gratuities received in the course of employment from

others than the employer to the extent the gratuities are reported for income

tax purposes." KRS 342.140(6). 2 The Court of Appeals determined that

unemployment compensation benefits are not money payments for services

rendered. We agree, as noted by the Court of Appeals, that such payments to a

laid off employee are made because the employee is not rendering any service

to the employer, not because he or she is rendering a service to the employer.

      Furthermore, with the exception of gratuities, wages are "received from

the employer." Unemployment compensation benefits are not received from the

employer but, as noted in Ford's benefit plan document, are "State System

Benefit[s]." In fact, Ford cannot calculate sub-pay until after an employee

begins receiving unemployment compensation benefits because Ford does not

know how much unemployment compensation the employee will receive.

Certainly, if Ford was paying that benefit to the employee, it would know the

amount of the payment. Therefore, based on the unambiguous language of

KRS 342.140(6), unemployment compensation benefits are not wages.

      2   The term wages is similarly defined in KRS 342.0011(17).
      Despite the unambiguous language of the statute, Jewell argues that

unemployment compensation benefits should be included as wages because:

(1) employers are entitled to a credit for unemployment benefits pursuant to

KRS 342.730(5); (2) unemployment compensation benefits, like wages, are paid

directly to the employee and taxable; and (3) Ford uses unemployment

compensation benefits "to compensate their employees instead of paying the

contractual base rate." We address each argument below.

      First, KRS 342.730(5) provides that lain income benefits pursuant to

this chapter otherwise payable for temporary total and permanent total

disability shall be offset by unemployment insurance benefits paid for

unemployment during the period of temporary total or permanent total

disability." This part of KRS Chapter 342 addresses liability for benefits due to

disability that results after an injury has occurred. It has nothing to do with

AWW, which is based on wages earned before an injury occurred.

      Second, Jewell is correct that unemployment compensation is paid

directly to the employee and taxable, just as wages are. However, as set forth

above, it is, in part, the source of a payment that determines whether that

payment is considered wages. Wages, excluding gratuities, are "received from

the employer." The unemployment compensation system is funded, in part, by

employer assessments; however, funds in the system are "commingled and

undivided," KRS 341.490(2), and benefits are "paid through employment

offices, or such other agencies as may be designated by regulation." KRS

341.380(1). Because unemployment compensation benefits are not directly

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traceable to an individual employer and are not directly paid to a claimant by

an individual employer, they are not "received from [an] employer" and are not

wages. Furthermore, because unemployment compensation benefits are not

wages, whether they are taxable is irrelevant.

      Third, Jewell states that Ford is obligated by its contract with the Union

to pay 95% of base pay during lay-offs. He insinuates that Ford nefariously

uses unemployment compensation in order to meet that obligation. Jewell has

not cited to where in the record we can find the actual contract to which he

refers. Instead, he cites us to the "Your Employee Benefits" document to

support his argument. That document states that employees are entitled to

weekly "Regular Benefits" based on 95% of weekly after-tax pay less any state

unemployment benefits. It does not state that Ford is obligated to pay 95% of

weekly after-tax pay. In fact, it says just the opposite. If this document and

Ford's method of calculating "Regular Benefits" are not in keeping with the

collective bargaining agreement, that is an issue for a different forum.

Furthermore, whether Ford takes, or does not take, a credit for unemployment

compensation benefits in calculating "Regular Benefits" does not change the

nature of the unemployment compensation benefits for workers' compensation

purposes. Those benefits are not payments for services rendered and they are

not received from the employer; therefore, they are not wages.

      Finally, we note, as did the Court of Appeals and the Board, that

numerous other jurisdictions and authorities state that unemployment

compensation should be excluded from the calculation of wages. See In re

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Mike's Case, 73 Mass. App. Ct. 44, 49, 895 N.E.2d 512, 515 (2008)

(unemployment benefits not created or contemplated by the workers'

compensation statute); Reifsnyder v. W. C.A.B. (Dana Corp.),   584 Pa. 341, 359-

60, 883 A.2d 537, 548 (2005) ("The Workers' Compensation system operates to

insure a worker against the economic effects of a workplace injury, not against

the economic effects of variations in the business cycle"); Zanger v. Indus.

Comm'n, 306 Ill. App. 3d 887, 892, 715 N.E.2d 767, 770 (1999) (benefits to be

based on actual earnings from employment at time of injury); and Arthur

Larson, Larson's Workers' Compensation Law, § 93.01(2)(a) (2012)

("Unemployment benefits received during "down-times" during the year prior to

the injury, while otherwise employed by the employer, are not 'wages' and,

accordingly, are not used to compute the average weekly wage.").

Although not bound by the preceding, we agree with the reasoning contained

therein. Our workers' compensation statute, like Massachusetts', is separate

and apart from our unemployment statute. Our workers' compensation

system, like Pennsylvania's, is designed to compensate for injuries, not

economic fluctuations. And our wages, like Illinois's, are based on actual

earnings from employment, not payment made to the unemployed.

                                 IV. CONCLUSION.

      For the foregoing reasons, we affirm the Court of Appeals's holding that

the ALJ correctly excluded unemployment compensation benefits when he

calculated Jewell's average weekly wage.

      All sitting. All concur.

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COUNSEL FOR APPELLANT:

Charles E. Jennings

COUNSEL FOR APPELLEE
FORD MOTOR COMPANY:

Peter J. Glauber
Phillip J. Reverman, Jr.
Elizabeth M. Hahn
Boehl, Stopher 86 Graves, LLP   .

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