May 01, 2008

Flight Attendant’s Reimbursement of Expenses Is Not Included in the Average Weekly Wage

May 01, 2008

United Airlines, Inc. v. Workers’ Compensation Commission No. 1-07-1316WC

Mary Ritter in 1998, employed by United Airlines as a flight attendant, suffered two work-related accidents.  The first occurred on August 27, 1998 when she sustained an injury to her back and the second on September 9, 2000 when she re-injured the back and never returned to work as a flight attendant.  She retired from United on August 2, 2002 and, at the time of the arbitration hearing, she was working twenty hours per week as an assistant chaplain providing religious and social services to inmates at the Sarasota Florida County jail.

The claimant introduced into evidence the Collective Bargaining Agreement governing the wages for United flight attendants.  In addition to an hourly rate of pay and premiums for certain positions, flight attendants receive per diem payments which were included in the claimant’s regular paychecks, 1) when the claimant was not required to stay overnight, her per diem payments were subject to income taxes; and 2) no taxes were withheld for the per diem payments made during trips that lasted more than one day.  At the time of her second injury, the claimant was flying primarily to Japan and no taxes were withheld.

The claimant testified that her per diem payments approximated $230 for each trip but that she would only spend around $50 when she went to Japan with her expenses varying on the trips.  The claimant argued that the difference between her average meal expense of $50 and the $230 per diem payment constituted a “real economic gain” and should be included when calculating her average weekly wage.  She admitted, however, that she did not keep “any expense vouchers or track of any costs while (she was) traveling.”  United argued that the claimant’s own trial testimony established that any claim of “real economic gain” was at best, speculative.  The Commission found that all of the per diem payments constituted economic gain, and therefore, should have been included in computing the claimant’s average weekly wage and that, therefore, the claimant was entitled to a wage differential of $327.04 per week.

The circuit court affirmed the Commission decision but the appellate court reversed.  The court stated:

In arguing for affirmance, the claimant maintains that the reimbursements for her travel expenses should not be excluded from her average weekly wage, absent evidence of the actual expenses she incurred.  Such a rule, however, would improperly shift the burden of proof to United to prove that the per diem payments did not represent real economic gain.  The claimant, and not United, had the burden of proving her average weekly wage.  As noted above, the record reflects that the claimant presented some evidence from which it could be inferred that the per diempayments she received exceeded her actual expenses.  Consequently, this cause must be remanded to the Commission for a determination as to whether, and to what extent, the claimant’s per diem payments exceeded her actual expenses.

Editor’s Note:

Clearly, the fact that the circumstances of the per diem payment had been described in the Collective Bargaining Agreement limited the claimant’s ability to establish “real economic gain.”  The very nature of the claimant’s testimony exhibited “uncertainty” as to the allocation of the per diem payments.  She used terms such as “usually”, “it would vary” and “it’s hard to remember” which testimony would make a calculation impossible.

The appellate court opinion reverses the IWCC’s expansive treatment of “travel expenses” as earnings includable in average weekly wage unless there is proof of “real economic gain.”

United Airlines, Inc. v. Workers’ Compensation Commission No. 1-07-1316WC, decided April 29, 2008

Frank J. Wiedner, Editor Wiedner & McAuliffe, Ltd One North Franklin, #1900 Chicago, IL 60606 (312) 855-1105