Is Equipment Rental & Other Per Diem Allowances Included in My Workers’ Comp Rate in PA?

Whether rig rental and other per diem allowances can be included in an average weekly wage calculation is a seldom asked question. Other than board and lodging, they cannot be included, unless it can be shown that the money was available for “personal use”.

Section 309(e) of the Act defines the term “wages”. Board and lodging (otherwise known as per diem), gratuities, incentives, vacation pay, sickness and accident benefits, and bonuses are considered wages, but fringe benefits are not. Wages are further defined as: “Compensation given to a hired person for his or her services, based on time worked or output of production, it is a term that should be broadly defined to include periodic monetary earnings and all compensation for services rendered without regard to the manner in which such compensation is computed. Mullen v. WCAB, 945 A.2d 813 (2008).

An Average Weekly Wage (AWW) calculation is based only on “wages”. The PA Workers’ Comp Act does not provide for non-monetary renumeration, other than board and lodging, to be included in the AWW calculation. This would include mileage reimbursement and business expenses that are not available for personal use and which renumeration is being used for the item covered by the expense. Glinka v. WCAB, 462 A.2d 909 (Pa.Cmwlth. 1983). A presumption exists that a business expense is not included in the AWW calculation. To overcome the presumption, a claimant must produce a federal tax return showing that the item reimbursed was not listed as a deduction or depreciated. Glinka.

Adams v. WCAB, 527 A.2d 625 (Pa.Cmwlth. 1987) holds that reimbursement for a chain saw rental and fuel costs are not considered wages for AWW calculation purposes. On his income tax return, claimant deducted a depreciation allowance for the saw and fuel costs and paid income tax on the balance he received from the equipment rental. The Court held that since Section 309(e) of the Act is silent regarding payments for rental of equipment, it must be concluded that the legislature intended to exclude it from wage computation.