CASE NO. 2271 CRB-8-95-1
COMPENSATION REVIEW BOARD
WORKERS’ COMPENSATION COMMISSION
JUNE 26, 1996
BARTLETT NUCLEAR, INC.
COMMERCIAL UNION INS. CO.
The claimant was represented by Terrance D. Lomme, Esq., Lomme & Douglas, 28 Main St., Essex, CT 06426.
The respondents were represented by David J. Weil, Esq., Nuzzo & Roberts, L.L.C., One Town Center, P. O. Box 747, Cheshire, CT 06410.
This Petition for Review from the January 13, 1995 Finding and Award of Compensation by the Commissioner acting for the Eighth District was heard December 1, 1995 before a Compensation Review Board panel consisting of the Commission Chairman Jesse M. Frankl and Commissioners Roberta Smith Tracy and Amado J. Vargas.
JESSE M. FRANKL, CHAIRMAN. The respondents have petitioned for review from the January 13, 1995 Finding and Award of Compensation of the Commissioner acting for the Eighth District. They argue on appeal that the commissioner erroneously included payments received by the claimant for reimbursement of his temporary duplicate living expenses in his average weekly wage under § 31-310 C.G.S. We agree with the respondents, and reverse the trial commissioner’s decision.
The trial commissioner found that the claimant was hired by the respondent Bartlett Nuclear, Inc. (Bartlett) to serve as a technician at the Connecticut Yankee nuclear power plant in Haddam, where he began working on May 8, 1993. He suffered a compensable injury to his right elbow on June 1, 1993. At the time of his employment with Bartlett, the claimant’s permanent home address was in Salem, South Carolina. The claimant signed a certification required for reimbursement of temporary lodging expenses while he was staying in the Haddam area, as he maintained a home over 40 miles away from Haddam. Thus, in addition to his $14.50 per hour salary, the claimant received $50.00 per diem for reimbursement of his lodging expenses.
The claimant argued that the per diem amounts represented economic gain to him consistent with Thibeault v. General Outdoor Advertising Co., Inc., 114 Conn. 410 (1932), and that they should be included in his average weekly wage. The commissioner noted the claimant’s testimony that Bartlett never inquired as to his actual expenses in making the reimbursement payments, and cited the discretionary authority given her by Thibeault to decide what the parties intended by their arrangement. Id., 414. She concluded that the claimant’s total wages under § 31-310 should include the $50.00 per diem payments he received from Bartlett. The respondents have appealed that decision.
The facts of this case are in many ways identical to the facts in Wonacott v. Bartlett Nuclear, Inc., 2237 CRB-4-94-12 (decided June 25, 1996), in which matter this board recently issued an opinion. There, the parties stipulated that the claimant received allowances for living expenses which were not reported as income to the federal government. They also stipulated that Bartlett made the payments in an attempt to comply with federal tax regulations allowing an employee to receive a per diem expense stipend without the need for substantiating the actual expenses. No other evidence was presented in that case. The commissioner speculated that the claimant could have pocketed the entire allowance, as no one presented evidence of actual living expenses, and he ruled that it should be included the claimant’s total wages under § 31-310.
This board reversed that decision. The stipulated facts clearly reflected that both parties contemplated that the federal tax rules would be applicable, and that they acted accordingly by failing to include the expense allowance in the claimant’s income. Under said tax laws, “actual living expenses” are not relevant; instead, the number of travel days is. 26 CFR § 1.62-2(f)(2). Moreover, there were no facts in the stipulation to establish that the claimant received the allowance as compensation for his services. The commissioner improperly went outside the scope of the stipulation in penalizing the respondents for failing to provide evidence of the claimant’s actual living expenses. At the very least, he should not have made a finding in that regard without giving both parties the chance to address that concern at a hearing.
The trial commissioner’s role in the instant case was somewhat different, as she was not limited to considering a stipulation of facts. Instead, she heard the testimony of several witnesses, much of which focused on the nature of the living expense payments. The only exhibits in evidence were a form signed by the claimant entitled “Certification for Reimbursement of Temporary Lodging Expenses,” and a table of the claimant’s 1993 wages. From this evidence, the trial commissioner was charged with the duty of finding the facts, thus vesting in her the authority to determine the credibility of the witnesses and the weight of the evidence presented. Webb v. Pfizer, Inc., 14 Conn. Workers’ Comp. Rev. Op. 69, 70, 1859 CRB-5-93-9 (May 12, 1995). Her findings may be altered on review only if they are unsupported by the evidence in the record. Id., 71.
In making her decision, the commissioner relied on Thibeault, supra, which stated that the “test to be applied is, does the allowance represent a real and reasonably definite economic gain to the employee, reasonably within, or at least not contrary to, the fair intent of the parties . . . .” Id., 414. The Thibeault court noted that, in the absence of unusual circumstances, reimbursement payments for the living expenses of an employee who is away from home should not be included in his earnings. Id., 413. The court also stated that when an employer makes an allowance of a fixed sum to an employee when he is away from home, “no definite rule can be formulated but each case must be left to the reasonable determination of the commissioner upon its peculiar circumstances. Such an allowance may be the result . . . of an intent to grant additional compensation on account of the employee having to leave his home and the conditions under which he must live away from it, rather than as a mere reimbursement of expenditures incurred.” Id., 414-15.
The record supports the commissioner’s finding, based on the claimant’s testimony, that Bartlett never inquired as to his actual expenses. (Transcript, p. 10). It is also clear that he received a fixed sum for payment of living expenses rather than reimbursement for actual expenses. We do not believe, however, that the claimant’s testimony is sufficient to establish that he realized actual economic gain from the living expense payments, and that they were paid to him as compensation for his services rather than as reimbursement. See Wonacott, supra; Larson, Workmen’s Compensation Law, § 60.12(a) (“In computing actual earnings as the beginning point of wage-basis calculations, there should be included not only wages and salary but any thing of value received as consideration for the work, as, for example, tips, bonuses, commissions, and room and board, constituting real economic gain to the employee.” (Emphasis added.)).
As we discussed in Wonacott, where the only evidence reveals an intent by the parties to comply with federal tax regulations excluding employer-provided living expenses from taxable income, the record is insufficient to support a conclusion that such payments should be included in total wages under § 31-310. Some relationship between the benefit provided to the employee and the services the employee provides to the employer needs to be established in order for the benefit to qualify as compensation. See Pascarelli v. Moliterno Stone Sales, 14 Conn. Workers’ Comp. Rev. Op. 328, 2115 CRB-4-94-8 (Sept. 19, 1995) (“Income” is more broadly defined than “wages” under the Workers’ Compensation Act); see also Wilcox v. Borough of Naugatuck, 8 Conn. Workers’ Comp. Rev. Op. 24, 26, 812 CRD-5-89-1 (Feb. 1, 1990) (commissioner logically must deduct necessary expenses, i.e. taxes, to determine net “definite economic gain” to the employee).
Unlike Wonacott, no one in this case has stipulated that the parties intended to follow the federal tax regulations prescribing the rules for deductible per diem allowances to employees. However, both the certification signed by the claimant and much of the testimony by the claimant and the other witnesses, particularly Mr. Mulready, show an awareness of the same tax regulations at issue in Wonacott. The claimant stated that he did not claim the reimbursement payments as income (Transcript, p. 21, 24), and both Mr. Bowen (Id., p. 38) and Mr. Mulready (Id., p. 46) declared that the 1993 per diem payments were not included in taxable income. Although the commissioner is never required to credit particular testimony, there is a dearth of evidence opposing it here.
Federal tax regulations do not control the definition of “wages” under the Workers’ Compensation Act. At the same time, this commission should not totally ignore the system that our federal government has set up to define an individual’s income. Where, as in Wonacott, the only evidence available to the commissioner demonstrates an intent to legitimately exclude payments for living expenses from income, it would be unfair to the employer to include such payments in the calculation of a claimant’s wages absent evidence that said living expense payments are in fact compensation for the claimant’s services. This is particularly true where a claimant admittedly has not included said payments in his income for federal tax purposes. Although the evidence before the commissioner in this case does not demonstrate as a matter of law that such a situation exists here, there is not enough evidence in the record to support her decision that Bartlett’s payments for reimbursement of lodging expenses constituted wages under our law. Consequently, this case must be remanded for further consideration consistent with this decision, and with the relevant language in Wonacott, supra.
The trial commissioner’s decision is reversed.
Commissioners Roberta Smith Tracy and Amado J. Vargas concur.