Tuma v. Commissioner of Economic Sec.
| Decision Date | 09 May 1986 |
| Docket Number | No. C1-85-723,C1-85-723 |
| Citation | 386 N.W.2d 702 |
| Parties | Keith J. TUMA, Petitioner, Appellant, v. COMMISSIONER OF ECONOMIC SECURITY, Respondent. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
Language "actually or constructively paid" in Minn.Stat. § 268.04, subd. 26 (1984), includes wages earned by an employee during his base period but not paid to the employee until after his base period had ended. Appellant is therefore entitled to have his final paycheck of $174 included as earned wage credits under Minn.Stat. § 268.071, subd. 3(3)(1984).
Bernard P. Becker, Eric S. Janus, William Mitchell Law Clinic, St. Paul, for appellant.
Hubert H. Humphrey, III, Atty. Gen., James Patrick Barone, Sp. Asst. Atty. Gen., St. Paul, for respondent.
Heard, considered, and decided by the court en banc.
Appellant, Keith J. Tuma, seeks further review of a decision of the Court of Appeals, which upheld the Commissioner of Economic Security's ruling that Tuma is ineligible for extended unemployment benefits under Minn.Stat. § 268.071(1984). The Commissioner, through her representative, denied Tuma extended benefits because Tuma was allegedly $60 short of the total wage credits needed under Minn.Stat. § 268.071, subd. 3(3), to qualify. In calculating Tuma's wage credits under subdivision 3(3), however, the Commissioner excluded Tuma's final paycheck on the grounds that it did not constitute "wage credits" under Minn.Stat. § 268.04, subd. 26 (1984). Tuma appealed this decision to the Court of Appeals, which upheld the Commissioner's ruling. We now reverse the decision of the Court of Appeals and hold that Tuma is entitled to extended unemployment benefits.
On February 9, 1984, Keith Tuma was terminated as an employee of Graham Towing, Incorporated. Tuma had been employed as a tow truck driver for Graham and was laid off for economic reasons. Tuma applied for unemployment compensation on February 17, 1984. His application was made effective February 12, 1984, which gave him a base period for calculating unemployment compensation of February 13, 1983, to February 11, 1984. See Minn.Stat. § 268.04, subd. 2.
Tuma's total wages for his base period amounted to $7,711.14. Of this amount, however, only $7,537.14 was included by the Commissioner within his base period in order to determine unemployment compensation. The other $174 was excluded from the calculation of extended benefits because it had not actually been paid to Tuma within his base period. Excluding this amount left Tuma $60 short of the amount needed for him to qualify for extended benefits under Minn.Stat. § 268.071, subd. 3. The $174 represented wages paid to Tuma by Graham for work performed on February 6-8, 1984. Under Graham's method of paying wages, the wages for those 3 days fell within a pay period that ended February 12, 1984. The wages were not paid, however, until February 17, 1984, because Graham's payment schedule required that wages earned during one payment period be paid 5 days after that period ended. 1
When Tuma applied for extended benefits, a Department of Economic Security claims deputy denied his request. The deputy determined Tuma was ineligible for extended benefits because he had earned insufficient "wage credits" during his base period. The $174 received by Tuma on February 17, 1984, was excluded from consideration as earned wage credits under Minn.Stat. § 268.071, subd. 3(3), because the funds had not actually been paid to Tuma prior to the end of his base period on February 11, 1984.
Tuma appealed the deputy's decision and an evidentiary hearing was held before a referee. The referee upheld the deputy's decision, ruling that the definition of "wage credits" in Minn.Stat. § 268.04, subd. 26, did not include the $174 earned by Tuma on February 6-8 but not paid to him until February 17. The referee adopted the Commissioner of Economic Security's interpretation of the definition of "wage credits" in making this ruling.
The referee's decision was affirmed on appeal by a representative of the Commissioner. The representative ruled that the definition of "wage credits" included only those wages both earned by and paid to an employee during the employee's base period. Wages earned during a base period, but not paid to the employee until after the base period ended, were excluded from the definition of "wage credits" under the Commissioner's interpretation. The Commissioner's interpretation was based on a 1983 amendment to the definition of "wage credits" in Minn.Stat. § 268.04, subd. 26. The Commissioner interpreted the 1983 amendment as effectively overruling our decision in Novitsky v. Department of Natural Resources, 320 N.W.2d 85 (Minn.1982). In Novitsky, we ruled that, under the prior definition of "wage credits," wages earned by an employee within his base period, but not paid to the employee until after his base period had ended, were included within the employee's base period as wage credits.
On a writ of certiorari, the Court of Appeals affirmed the Commissioner's decision in all respects, adopting the Commissioner's interpretation of "wage credits" under subdivision 26. See Tuma v. Commissioner of Economic Security, 374 N.W.2d 446 (Minn.App.1985). The court held that the general rules of statutory construction required that the Commissioner's interpretation of "wage credits" be upheld.
Extended unemployment compensation benefits are provided for in Minn.Stat. § 268.071 (1984). In order for an individual to qualify for extended benefits, the state must first be experiencing a period of high unemployment. See Minn.Stat. § 268.071, subds. 1(1)-(3), (6)-(8), 6 (1984). After the state has entered into an extended benefits period, the employee must also qualify for extended benefits. See id., subd. 3. Subdivision 3 lists three requirements an employee must meet before he or she can receive extended benefits:
Subd. 3. Eligibility requirements for extended benefits. An individual shall be eligible to receive extended benefits with respect to any week of unemployment in his eligibility period only if the commissioner finds that with respect to such week:
(1) He is an "exhaustee" as defined in subdivision 1, clause (9);
(2) He has satisfied the requirements of this law for the receipt of regular benefits that are applicable to individuals claiming extended benefits, including not being subject to a disqualification for the receipt of benefits, except that an individual disqualified for benefits pursuant to section 268.09, subdivision 1, clause (6) is not eligible for extended benefits unless the individual has, subsequent to the disciplinary suspension, earned at least four times his or her weekly extended benefit amount; and
(3) He has, during his base period earned wage credits available for benefit purposes of not less than 40 times his weekly benefit amount as determined pursuant to section 268.07, subdivision 2.
Id. The present appeal concerns the last of these requirements, that an employee have earned a certain number of wage credits within his or her base period.
"Wage credits" is currently defined as:
the amount of wages actually or constructively paid, wages overdue and delayed beyond the usual time of payment and back pay paid by or from an employer to an employee for insured work and tips and gratuities paid to an employee by a customer of an employer and accounted for by the employee to the employer except that wages earned in part-time employment by a student as an integral part of an occupational course of study, under a plan for vocational education accepted by the Minnesota department of education, shall not result in wage credits available for benefit purposes.
Minn.Stat. § 268.04, subd. 26 (1984). 2 Prior to 1983, "wage credits" was defined as:
the amount of wages paid and wages due and payable but not paid by or from an employer to an employee for insured work and tips and gratuities paid to an employee by a customer of an employer and accounted for by the employee to the employer except that wages earned in part-time employment by a student as an integral part of an occupational course of study, under a plan for vocational education accepted by the Minnesota department of education, shall not result in wage credits available for benefit purposes.
Minn.Stat. § 268.04, subd. 26 (1982).
In Novitsky v. Department of Natural Resources, 320 N.W.2d 85 (Minn.1982), we interpreted the 1982 definition of "wage credits." We held that the language "wages due and payable but not paid" included all wages earned during a base period even if they were not actually paid to the employee until after the base period ended. Id. at 87. In doing so, we rejected the Commissioner of Economic Security's interpretation of "wage credits" that wages earned by, but not paid to, an employee during his base period were not considered "wage credits" under the statute. Id.
In 1983, the legislature amended the definition of "wage credits" from "wages due and payable but not paid" to "wages actually or constructively paid * * *." See Act of June 14, 1983, ch. 372, § 5, 1983 Minn. Laws 2568. The Department has since reapplied its prior interpretation of wage credits to this new definition.
The dispute in this case concerns the proper interpretation of the definition of "wage credits" in subdivision 26. The parties disagree over the proper meaning of the language "wages actually or constructively paid" as it now exists in the statute. The Commissioner argues that the language is unambiguous and requires us to apply the plain meaning of the definition of "wage credits." The plain meaning of this language, the Commissioner argues, is the same as the Department's interpretation 3 of "wage credits," that wages not actually received by an employee within his base period are excluded from the definition of wage credits. Tuma, on the other hand, contends that the statutory language is ambiguous and that it must properly be...
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