Court of Appeals Decides Rate Case
The appellate courts have had a surfeit of rate cases before them recently, and in Hilltop Care Center v. Burton, 2010 WL 2598373 (No. 0-323 June 30, 2010), the court decided another such case. The rate dispute was premised on a unique factual situation. Ms. Burton was supposed to receive a raise, which amounted to $1,000 per year, but was instead paid an additional $1,000 per month, thus raising her income by $12,000 on a yearly basis. She was allegedly overpaid for the last 15 months she worked for the employer. Apparently, the error was not discovered until Ms. Burton filed unemployment papers following her discharge by the employer.
The deputy concluded that claimant should have been paid on the basis of her actual earnings, not on the basis of what her wages should have been. The commissioner affirmed. On judicial review, the district court reversed, finding that "an accounting error is not tantamount to an entitlement to an elevated wage." The district court also concluded the agency did not provide specific rationale for including a Christmas bonus as a part of claimant's wages, and remanded to the agency on that issue.
On the issue of "entitled" versus "paid" wages, the court noted the fundamental purpose of the statute to benefit injured workers and the liberal interpretation accorded the statute. The court rejected the employer's argument focusing on the second sentence of section 85.36 (weekly earnings means earnings "to which such employee would have been entitled had the employee worked the customary hours"), stating that the employer's argument took the phrase out of context. The court concluded that when read as a whole, the agency's interpretation was correct. The court noted the statute stated that weekly earnings were the earnings "at the time of the injury," and that Ms. Burton was receiving the increased income at the time of the injury. The court further noted that the focus of section 85.36 is on "whether the employee's earnings are 'customary.'" Citing Jacobson Transp. Co. v. Harris, 778 N.W.2d 192, 199 (Iowa 2010). According to Jacobson, customary benefits are those which are "typical," and in Ms. Burton's case, the actual wages paid (at the inflated rate) were the typical wages for her at the time of the injury.
On the bonus issue, the court distinguished Noel v. Rolscreen, 475 N.W.2d 666 (Iowa Ct. App. 1991). In Noel, the court found that a bonus had not been paid in the period specified under 85.36(6), and thus need not be considered. The court also found that the bonus was not a regular bonus because it varied in amount and was not fixed until late in the fiscal year. The court in Burton stated that since the bonus was paid during the applicable wage period, and because the bonus had been received in 2003, 2004 and 2005, there was substantial evidence supporting the conclusion that this was a regular bonus.
Other issues considered by the court included penalty benefits, the degree of functional impairment, apportionment and causation. On the penalty issue, the court reversed the agency's award of a $500 penalty for the rate dispute based largely on the fact that the district court had ruled in favor of the employer on this issue, and that this demonstrates that the employer's legal position was reasonable. The remaining issues were decided primarily on substantial evidence grounds.
Burton demonstrates that the liberal interpretation of the Act can still be a powerful concept for injured workers. When combined with a statutory construction argument that is plausible, injured workers are able to prevail, even in the unusual factual situation that was presented in Burton. An application for further review is pending (as of September 3, 2010) on the Burton case.
The deputy concluded that claimant should have been paid on the basis of her actual earnings, not on the basis of what her wages should have been. The commissioner affirmed. On judicial review, the district court reversed, finding that "an accounting error is not tantamount to an entitlement to an elevated wage." The district court also concluded the agency did not provide specific rationale for including a Christmas bonus as a part of claimant's wages, and remanded to the agency on that issue.
On the issue of "entitled" versus "paid" wages, the court noted the fundamental purpose of the statute to benefit injured workers and the liberal interpretation accorded the statute. The court rejected the employer's argument focusing on the second sentence of section 85.36 (weekly earnings means earnings "to which such employee would have been entitled had the employee worked the customary hours"), stating that the employer's argument took the phrase out of context. The court concluded that when read as a whole, the agency's interpretation was correct. The court noted the statute stated that weekly earnings were the earnings "at the time of the injury," and that Ms. Burton was receiving the increased income at the time of the injury. The court further noted that the focus of section 85.36 is on "whether the employee's earnings are 'customary.'" Citing Jacobson Transp. Co. v. Harris, 778 N.W.2d 192, 199 (Iowa 2010). According to Jacobson, customary benefits are those which are "typical," and in Ms. Burton's case, the actual wages paid (at the inflated rate) were the typical wages for her at the time of the injury.
On the bonus issue, the court distinguished Noel v. Rolscreen, 475 N.W.2d 666 (Iowa Ct. App. 1991). In Noel, the court found that a bonus had not been paid in the period specified under 85.36(6), and thus need not be considered. The court also found that the bonus was not a regular bonus because it varied in amount and was not fixed until late in the fiscal year. The court in Burton stated that since the bonus was paid during the applicable wage period, and because the bonus had been received in 2003, 2004 and 2005, there was substantial evidence supporting the conclusion that this was a regular bonus.
Other issues considered by the court included penalty benefits, the degree of functional impairment, apportionment and causation. On the penalty issue, the court reversed the agency's award of a $500 penalty for the rate dispute based largely on the fact that the district court had ruled in favor of the employer on this issue, and that this demonstrates that the employer's legal position was reasonable. The remaining issues were decided primarily on substantial evidence grounds.
Burton demonstrates that the liberal interpretation of the Act can still be a powerful concept for injured workers. When combined with a statutory construction argument that is plausible, injured workers are able to prevail, even in the unusual factual situation that was presented in Burton. An application for further review is pending (as of September 3, 2010) on the Burton case.
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