Vermont College’s “Tuition Benefit” Should Be Used in Average Weekly Wage Computation

In Haller v. Champlain College, 2017 VT 86, 2017 Vt. LEXIS 107 (Sept. 29, 2017), a divided Supreme Court of Vermont affirmed a determination by the Commissioner of the state’s Department of Labor that concluded tuition benefits provided by employer—and used by claimant—was an “other advantage” that constituted part of claimant’s wages [see 21 V.S.A. § 601(13)], and should, therefore, be used in calculating the injured employee’s average weekly wage. Quoting Larson’s Workers’ Compensation Law, § 93.01(2)(a), the majority held the tuition benefits received by the injured employee constituted real economic gain.

Background

Claimant, who worked for the college as recruitment director, sustained an admitted work-related injury in 2014. During the two years prior to her injury, she had taken numerous courses at the 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. Specifically, during the twenty-six weeks prior to her work-related injury, claimant completed ten and one half credits of classwork at the college, paying no money for these course credits.

Court’s Earlier Decision Regarding Health Insurance Benefits

Writing for the majority, Justice Robinson side-stepped the employer’s argument that the issue had already been decided with the Court’s earlier divided decision in Lydy v. Trustaff, Inc., 2013 VT 44, 194 Vt. 165, 76 A.3d 150. In Lydy, the majority of the Court held that employer-provided health insurance benefits were not “other advantages” included within the definition of wages. The Lydy majority had relied upon a decision of the United States Supreme Court [see Morrison-Knudsen Construction Co. v. Director, Office of Workers’ Compensation Programs, 461 U.S. 624, 103 S. Ct. 2045, 76 L. Ed. 2d 194 (1983)], in which the Court held that an employer’s contributions to union trust funds required under the terms of the collective bargaining agreement did not qualify as a “similar advantage” under the Longshore and Harbor Workers’ Compensation Act, the federal counterpart to state workers’ compensation laws. The U.S. Supreme Court narrowed the question before it to whether the employer’s contributions were a “similar advantage” to “board, rent, housing or lodging” and found they were not.

In Lydy, Justice Robinson dissented. Quoting Larson, § 93.01, the justice argued that there could be little doubt that health insurance was an “advantage” received by the employees as part of their remuneration. While Justice Robinson’s argument did not prevail in Lydy, it did so in the instant case.

Health Insurance is Broadly-Supplied Benefit

In the majority opinion in Haller, Justice Robinson observed that 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 Vermont Legislature had intended to include the 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. It was prudent, said Justice Robinson, to conclude that such a benefit was not intended to be part of an employee’s “average weekly wage”). The college’s tuition benefit was a different matter, stressed the justice.

Tuition Benefit Supplied Directly to Employee

The justice also stressed that unlike the situation in Morrison-Knudsen, upon which the Lydy majority had relied, the benefit at issue here—the tuition benefit—had been provided directly to claimant; it benefited her directly and quantifiably. Indeed, it was part of the compensation she was paid as a college employee. The justice added that it stood to reason that where an employer is able to offer a benefit such as free tuition that is valuable to many workers and prospective workers, the employer is better positioned to maintain at—or below—market cash wages. Justice Robinson stressed, however, that the majority’s position did not rest on that assumption.

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