Appeal from Commissioner of Labor Anne M. Noonan,
William B. Skiff, Burlington, for Plaintiff-Appellee.
Justin Sluka and Alycia M. Sanders of Ellis Boxer & Blake
PLLC, Springfield, for Defendant-Appellant.
PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton,
1. The question in this workers' compensation case is
whether employer Champlain College is obligated to include in
claimant Kimberly Haller's average weekly wage
calculation the value of tuition-free college credits she
earned in accordance with employer's graduate tuition
policy. On cross-motions for summary judgment, the
Commissioner of the Department of Labor concluded that the
tuition benefits provided by employer and used by claimant
was an "other advantage" that constituted part of
claimant's wages. 21 V.S.A. § 601(13). We agree and
2. The relevant facts here are undisputed. At all times
relevant to these proceedings claimant was an employee of
Champlain College for purposes of Vermont's workers'
compensation laws. On March 10, 2014, claimant suffered a
work-related injury, which employer has accepted. At the time
of her injury, claimant was employed as employer's
3. Since May 2012, claimant had taken numerous courses at
Champlain College pursuant to its "Tuition
Benefits" policy. That policy allows college employees,
their spouses, and eligible dependent children to take
undergraduate and graduate courses on a space-available
basis, tuition free. In relevant part, section 4.3.1 of
employer's Tuition Benefits policy provides:
Employees of the College may normally take for-credit
Graduate courses tuition-free on a
"space-available" basis. If an individual is
matriculating in a degree program every effort will be made
to accommodate that student in the current term and if space
prohibits then the student will be seated in the following
terms for that course . . . .
Books, residency costs, labs, fees and other non-tuition
expenses are not paid for by the College. IRS regulations
determine the maximum amount of tuition value, per calendar
year, that need not be reported as taxable wages. Note: IRS
regulations stipulate that tuition benefits valued at over
$5, 250 per calendar year are to be reported as taxable wages
on the employee's W-2 form unless the amount is
excludable as a "working condition fringe."
Champlain College pays the employer FICA taxes on taxable
wages. The employee is responsible for all other taxes.
Employee taxes are deducted during normal payroll cycles.
This benefit is not available to retirees.
4. During the twenty-six weeks prior to her work-related
injury, claimant completed ten and one half credits of
classwork at Champlain College. She paid no money for these
course credits. Claimant considered the free tuition policy
to be one of the benefits of working for employer as it
allowed her to work toward, and earn, a graduate degree
without paying any tuition. This free tuition was a
substantial financial benefit to claimant and was one of the
reasons she chose to work for employer.
5. The issue presented to the Commissioner on cross-motions
for summary judgment was whether the value of these tuition
benefits should be included in the calculation of
claimant's average weekly wage for the purposes of her
permanent partial disability benefit. "Wages" are
defined to include "bonuses and the market value of
board, lodging, fuel, and other advantages which can be
estimated in money and which the employee receives from the
employer as a part of his or her remuneration." 21
V.S.A. § 601(13). The specific issue in this case is
whether claimant's tuition benefits fall within
"other advantages which can be estimated in money and
which the employee receives from the employer as part of his
or her remuneration." Id.
6. In analyzing this question of first impression, the
Commissioner first distinguished this Court's recent
decision that the value of employer-provided health insurance
benefits should not be included in the calculation of wages.
See Lydy v. Trustaff, Inc., 2013 VT 44, 194 Vt. 165,
76 A.3d 150. In determining whether the tuition benefit
should be included in the wage calculation, the Commissioner
considered three questions gleaned from prior Department
decisions: First, is the benefit a "significant
part" of the compensation? Second, does the employee
derive true value from the offered benefit or is it a benefit
that means little to the employee except as an enhancement to
an average weekly wage? And third, is the value of the
benefit reasonably subject to objective valuation?
7. Noting the remedial nature of the workers'
compensation laws, the Commissioner answered the above
questions in the affirmative. The free tuition was a
substantial benefit to claimant and was one of the reasons
she worked at Champlain College. She derived true value from
the program; she had taken advantage of it from 2012 until
2014 and was using it to acquire a master's degree. And,
finally, the benefit was subject to simple
valuation. The Commissioner explained that including
the value of the free tuition in claimant's wage
calculation would not upset the "delicate balance"
struck between employees and employers in the workers'
compensation setting and concluded that the free tuition
benefit claimant received qualified as an "other
advantage" that can be easily estimated and that was
paid to her as remuneration for her work.
8. Employer appealed, and the Commissioner certified for our
review the question of whether employer was obligated to
include in claimant's average weekly wage calculation the
value of tuition-free college credits earned by claimant in
accordance with its employee tuition policy.
9. On appeal, employer argues first and foremost that this
Court's recent ruling that employer-provided health
insurance benefits are not "other advantages"
included within the definition of wages dictates the outcome
of this case. See Lydy, 2013 VT 44. Employer further
argues that the benefit in question did not amount to
"remuneration, " 21 V.S.A. § 601(13), that the
Commissioner's determination that the tuition benefit was
capable of simple valuation was based on a mistake of fact,
and that the Commissioner's decision will upset the
"delicate balancing" between an injured
worker's right to compensation and an employer's
right to limited and determinate liability. Lydy,
2013 VT 44, ¶ 19.
10. In construing a statute, "[o]ur paramount goal . . .
is to give effect to the Legislature's intent."
State v. Deyo, 2006 VT 120, ¶ 14, 181 Vt. 89,
915 A.2d 249. In interpreting the workers' compensation
statute, "we will defer to the Commissioner's
construction of the Workers' Compensation Act, absent a
compelling indication of error." Lydy, 2013 VT
44, ¶ 4 (quotation omitted). Our deference is not
unlimited, however, and "we will not affirm an
interpretation that is unjust or unreasonable."
Clodgo v. Rentavision, Inc., 166 Vt. 548, 550, 701
A.2d 1044, 1045 (1997). Moreover, in reviewing the
Commissioner's determination, we must be mindful that our
workers' compensation laws are "remedial in nature
and must be liberally construed to provide injured employees
with benefits unless the law is clear to the contrary."
St. Paul Fire & Marine Ins. Co. v. Surdam, 156
Vt. 585, 590, 595 A.2d 264, 266 (1991).
11. We conclude there was no compelling indication of error
in the Commissioner's determination for several reasons.
First, this case is different from Lydy in several
notable and significant ways. While our analysis in
Lydy may shed some light on the applicable
standards, Lydy is in no way controlling in this
case. Second, the Commissioner's analysis gives effect to
the language of the workers' compensation statute and is
consistent with that law's purposes. Third, the
Commissioner's decision is consistent with the
Department's own caselaw on the subject.
12. This Court's decision in Lydy does not
control the outcome of this case. In Lydy, the
Court, in a 3-2 decision, concluded that employer-provided
health insurance benefits were not an "other
advantage" received as part of the employee's
remuneration. 2013 VT 44, ¶ 19. Several considerations
that do not apply here weighed heavily in the Court's
analysis in that case.
13. In Lydy, the Commissioner ruled that the health
insurance benefit was not an "other
advantage" for the purposes of the wage calculation.
Id. ¶ 1. The deference we afford to the
Commissioner's construction of the workers'
compensation laws, absent a compelling indication of error,
supported exclusion of health insurance benefits from the
definition of wages in Lydy, but supports
inclusion of the free tuition benefit in this case.
Id. ¶ 4. Moreover, the Commissioner's
determination that health insurance was not an "other
advantage" was consistent with twenty years of
established, and unappealed, departmental case law.
Id. ¶ 18; see also Pelissier v. Hannaford
Bros., No. 26-11WC (Sept. 11, 2009),
[https://perma.cc/Q4RW-BQEL] (citing a series of decisions
dating back to 1990 in which the Commissioner rejected
argument that value of health insurance should be included in
wage calculation). A decision to the contrary would have
upset long-settled expectations and actuarial calculations
with potentially a substantial impact on the workers'
compensation system. Lydy, 2013 VT 44, ¶ 18.
14. Plus, the prevalence of health insurance as an employment
benefit across sectors and through most of the labor market
lent particular support to the notion that if the Legislature
had intended to include this widely provided benefit as part
of wages, it would not have relied on the catch-all
"other advantages, " but would have expressly
included health insurance in the definition of wages. See
id. ¶ 11 (explaining that "because the
Legislature has not amended the definition [of wages] to
include employer-paid health insurance after it developed
into a customary benefit, it is prudent to conclude that such
a benefit was not intended to be part of an employee's
average weekly wage").
15. Finally, the Court's analysis in Lydy relied
in part on a U.S. Supreme Court decision that an
employer's contributions to a union trust fund that
supported life insurance, health insurance, retirement
benefits, and career training for employees, were not wages
under the Longshore and Harbor Workers' Compensation
Act-a statute with a similar, but not identical, definition
of wages to Vermont's workers' compensation statute.
See id. ¶¶ 13-16 (discussing
Morrison-Knudsen Constr. Co. v. Dir., Office of
Workers' Comp. Programs, 461 U.S. 624 (1983)). In
Lydy, this Court explained that one reason the
Supreme Court concluded that employer's payments into the
union trust fund did not constitute a "similar
advantage" under the federal workers' compensation
law was that was that there was no way to value the benefit
actually received by the employee deriving from the
employer's contributions to that trust fund.
Lydy, 2013 VT 44, ¶ 13 (citing
Morrison-Knudsen, 461 U.S. at 631). This Court
analogized the health insurance benefit to the employer's
contribution to the union trust fund in
Morrison-Knudsen, and concluded that the value of
the health insurance coverage actually received by the
employee was likewise speculative. Id. ¶ 14.
16. The same cannot be said for the value of free tuition
benefits. The undisputed record reflects that claimant
herself received the free tuition benefit, and that the value
to the employee of the benefit is readily ascertainable.
Employer's policies specifically note that employer is
responsible for tracking the benefit to the employee and
reporting the imputed income on the employee's W-2 to the
extent that it exceeds $5250 per calendar year. Wholly
independent of any workers' compensation claim, the
record reflects that there is an established methodology for
determining not the employer's costs-which were all that
was known in Morrison-Knudsen- but the benefit to
the employees. Moreover, the courses available to claimant
are offered to Champlain College students more broadly at a
set price. The "market value" of the courses, and
the associated credits, ...