Bosworth v. 7-Up Distributing Co. of Fredericksburg, Inc., 0464-86-2

• Decision Date: 21 April 1987
• Docket Number: No. 0464-86-2,0464-86-2
• Citation: 4 Va.App. 161,355 S.E.2d 339
• Court: Virginia Court of Appeals
• Parties: , 28 Wage & Hour Cas. (BNA) 215 Neva J. BOSWORTH v. 7-UP DISTRIBUTING COMPANY OF FREDERICKSBURG, INC., and Indemnity Insurance Company of America. Record

Page 339

355 S.E.2d 339

4 Va.App. 161, 28 Wage & Hour Cas. (BNA) 215

Neva J. BOSWORTH v. 7-UP DISTRIBUTING COMPANY OF FREDERICKSBURG, INC., and Indemnity Insurance Company of America.

Record No. 0464-86-2.

Court of Appeals of Virginia.

April 21, 1987.

Charles D. Bennett, Jr., Fredericksburg, (Michael C. Mayo; Mayo & Mayo, Colonial Beach, on brief), for appellant.

Charles F. Midkiff (Christian, Barton, Epps, Brent & Chappell, Richmond, on brief), for appellees.

Present: BAKER, BENTON and KEENAN, JJ.

BENTON, Judge.

The appellant, Neva J. Bosworth, contends that the commission erred in excluding from its computation of her deceased husband's average weekly wage the amount of a weekly automobile allowance paid to him by his employer, 7-UP Distributing Company of Fredericksburg, Inc. We conclude that the commission did not err and affirm the award.

The stipulated facts before the commission were brief. Robert Bosworth was killed in an automobile collision arising out of and in the course of his employment as a travelling salesman for 7-UP. Bosworth used his own automobile for his employment-related travel. In return, 7-UP paid to him an automobile allowance of $75 per week to cover the costs of depreciation, tires, oil, gas, insurance and other expenses associated with the operation of his automobile in his employment.

The deputy commissioner held that since the automobile allowance provided no financial gain to Bosworth but was rather in the nature of reimbursement for out-of-pocket work related expenses, "the [automobile] allowance cannot be included as wages for the purpose of calculating average weekly wage." The commission agreed and affirmed the deputy commissioner's award.

Code § 65.1-6 provides, in pertinent part, that "[w]henever allowances of any character made to an employee in lieu of wages are a specified part of the wage contract, they shall be deemed a part of his earnings." (emphasis added). Thus, an allowance paid to an employee must be included in the average weekly wage calculation if the allowance meets two conditions: first, the allowance must be specifically provided for in the contract of employment, and, second, the allowance must be of such character as to indicate that it is paid "in lieu of wages." We do not discuss the first of these requirements because the second is dispositive of this appeal.

The reason for calculating the average weekly wage is to approximate the economic loss suffered by an employee or his beneficiaries when there is a loss of earning capacity because of work-related injury or death. See Code § 65.1-6; Layne Atlantic Co. v. Scott, 415 So.2d 837, 838 (Fla.Dist.Ct.App.1982). See generally John Driggs Co. v. Somers, 228 Va. 729, 324 S.E.2d 694 (1985). Furthermore, "[i]n 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 ... constituting real economic gain to the employee." 2 A. Larson, Workmen's Compensation Law § 60.12(a) (1986).

In determining whether the allowance paid to Bosworth was in lieu of wages, the pertinent question is whether the allowance represented a payment made in consideration for work and constituted an economic gain to him. See generally Moorehead v. Industrial Commission, 17 Ariz.App. 96, 99, 495 P.2d 866, 869 (1972); P & L Construction Co., Inc. v. Lankford, 559 S.W.2d 793, 795 (Tenn.1978). We conclude that it did not.

Not every payment made to an employee is made "in lieu of wages."

As a general rule ... amounts paid an employee as reimbursements for expenditures which he is called upon to make in the course of his employment, in activities which he has no occasion to pursue when not employed, are not part of his earnings for the purpose of fixing workmen's compensation.

82 Am.Jur.2d Workmen's Compensation § 371 (1976); see also Moorehead v. Industrial Commission, 17 Ariz.App. at 99, 495 P.2d at 869. Bosworth's automobile expenses, which were incurred solely to meet the travel obligations of his employment, fall within the category of expenditures for an activity that he would not have pursued except for his employment. To the extent that Bosworth's automobile expenses equalled or exceeded the amount of the automobile allowance, the allowance did not...