Supreme Court Concludes that Employer's Contributions to 401(k) are Not a Part of Gross Wages for Rate Purposes
In Evenson v. Winnebago Industries, No. 14-2097 (Iowa June 3, 2016), the Supreme Court concluded that an employer's matching contributions to a 401(k) plan are not weekly earnings for rate purposes. The Court also concluded that the district court erred in affirming the date on which the healing period commenced and ended and the date on which PPD benefits commenced. On the rate issue, the court noted that "gross earnings" was defined in section 85.61(9) as recurring payment by the employer before deductions and excluding irregular bonuses, overtime pay, reimbursement of expenses and the employer's contribution for welfare benefits. The Court notes that although an employee's 401(k) plan is related tangentially to his or her wage or salary, an employer's 401(k) plan matching contributions are based on the employee's choice and contribution. Although the portion the employee chooses to contribute to the plan comes from his wages, the added contribution ...