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Clukey v. Piscataquis County Sheriff
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MAINE SUPREME JUDICIAL COURT				Reporter of Decisions
Decision:	1997 ME 124
Docket:	WCB-95-525
Argued:	February 5, 1997
Decided:	June 4, 1997

Panel: ROBERTS, GLASSMAN, CLIFFORD, DANA, and LIPEZ, JJ.




DALE CLUKEY, JR. v. PISCATAQUIS COUNTY SHERIFF'S DEPARTMENT, et al.


LIPEZ, J.
	
	[¶1]  The employer, Piscataquis County Sheriff's Department ("the
County"), appeals from a decision of the Workers' Compensation Board
granting the employee Dale J. Clukey's petition for award.  The County
contends that weekly allowances for meals and housing from his part-time
concurrent employment with the National Guard should not be included in
Clukey's average weekly wage.  39-A M.R.S.A. §§ 102(4)(F), (4)(H) (Supp.
1996).  We affirm the decision of the Board.
	[¶2]  The facts of this appeal are not in dispute.  Clukey was totally
incapacitated by a work-related injury on October 31, 1993, while working
part-time for the Piscataquis County Sheriff's Department.  His part-time
weekly earnings from the County were $43.98.  At the time of his injury,
Clukey also had a full-time concurrent job as a staff sergeant with the Maine
Air National Guard.   His base pay from the Guard was $378.90 per week.  In
addition to his base pay, Clukey also received the following meal and housing
allowances:

(1) Basic Allowance for Subsistence ("BAS") = $59.44 per week.   The
BAS is provided for the payment of meals for military personnel who
do not receive meals at the base.  37 U.S.C. § 402 (1996).	
(2) Basic Allowance for Quarters ("BAQ") = $103.87 per week.  The
BAQ is provided to military personnel who do not receive military
housing and is calculated according to marital status and number of
dependents.  37 U.S.C. § 403 (1996).
(3) Variable Housing Allowance ("VHA") = $21.59 per week.  The VHA
is provided to employees who do not receive military housing as a
supplement to the BAQ.  The VHA is calculated according to actual
housing costs that the employee must certify annually.  37 U.S.C.
§ 403a (1996).

	[¶3]  Clukey filed a petition for award in 1994.  There was no dispute
that Clukey's wage should be calculated pursuant to 39-A M.R.S.A.
§ 102(4)(A), applicable to employment that continues longer than 200 days,
or that his concurrent employment with the Guard should be included in
the calculation pursuant to 39-A M.R.S.A. § 102(4)(E).  The only dispute was
whether the BAS, BAQ or VHA should be included in the wage.  The Board
granted the petition in August 1995, concluding that the allowances should
be included in the average weekly wage.  We granted the County's petition
for appellate review pursuant to 39-A M.R.S.A. § 322.
	[¶4]  The County contends that the military allowances are a "special
expense" pursuant to 39-A M.R.S.A. § 102(4)(F), providing that "[w]hen the
employer has paid the employee a sum to cover any special expense
incurred by the employee by the nature of the employee's employment, the
sum paid is not reckoned as part of the employee's wages, earnings or
salary."  39-A M.R.S.A. § 102(4)(F).  The County also contends that the
allowances constitute "fringe or other benefits" and are therefore excludable
pursuant to subsection 102(4)(H):

H.  "Average weekly wages, earnings or salary" does not include
any fringe or other benefits paid by the employer that continue
during the disability.  Any fringe or other benefit paid by the
employer that does not continue during the disability must be
included for purposes of determining an employee's average
weekly wage to the extent that the inclusion of the fringe or
other benefit will not result in a weekly benefit amount that is
greater than 2/3 of the state average weekly wage at the time of
the injury.

39-A M.R.S.A. § 102(4)(H).{1}  We conclude that the BAS, BAQ and VHA are a
basic part of Clukey's regular military compensation and therefore should be
included in his average weekly wage.
 	[¶5]  Title 37 U.S.C. §101(25) expressly includes the BAS, BAQ and
VHA in the statutory definition of the term "regular compensation."  37
U.S.C. § 101(25) (1996).  Although the allowances are expressly excluded
from the definition of the term "pay," 37 U.S.C. § 101(21) (1996), Congress
enacted the statutory definition of the term "pay," Pub. L. No. 87-649, § 1,
76 Stat. 451 (1962), several years prior to its definition of the term "regular
compensation," Act of Dec. 16, 1967, Pub. L. 90-207, § 8, 81 Stat. 649,
1967 U.S. Code Cong. & Admin. News (81 Stat.) 720-21; Act of Sept. 19,
1974, Pub. L. 93-419, §1, 88 Stat. 1152 (codified at 37 U.S.C. § 101(25)). 
The history of military pay legislation suggests an evolution from the view
that military allowances for food and lodging are reimbursement for a
necessary expense of military life,{2} to the modern view that these
allowances are intended as compensation and an inducement to enlist. 
	[¶6]  The BAS and BAQ were originally codified in the Career
Compensation Act of 1949.  Pub. L. 81-351, 63 Stat. 681, 1949 U.S. Code
Cong. & Admin. News (63 Stat.) 815, 825-26.  The purpose of the Act was
two-fold: (1) To "establish[] a uniform pattern of military pay and allowances,
consolidating and revising the piecemeal legislation that had been developed
over the previous 40 years," Frontiero v. Richardson, 411 U.S. 677, at 681,
n. 6 (1973); and (2) "to establish for the uniformed services a compensation
pattern which will tend to attract and retain first-class personnel in the
armed services. . . ."   S. Rep. No. 733, 81st Cong., 1st Sess., reprinted in
1949 U.S. Code Cong. & Admin. News 2089; Frontiero, 411 U.S. at 679-80.  
	[¶7]  In 1967 Congress instituted regular military pay raises for the
purpose of keeping pace with pay raises for civilian government employees,
Act of Dec. 16, 1967, Pub. L. 90-207, § 8, 81 Stat. 649, 1967 U.S. Code
Cong. & Admin. News (81 Stat.) 720, and "to insure that the uniformed
services will continue to retain in sufficient numbers the skilled manpower
so indispensable to the maintenance of our national security."  S.Rep. 808,
90th Cong., 1st Sess., reprinted in 1967 U.S. Code Cong. & Admin. News
2319-20.  The 1967 pay increases were calculated as a percentage of an
individual's "regular compensation," defined to include "basic pay, quarters
and subsistence allowances (either in cash or in kind), and the tax
advantages on those allowances."  Act of Dec. 16, 1967, Pub. L. 90-207, § 8,
81 Stat. 649, 1967 U.S. Code Cong. & Admin. News (81 Stat.) 721.  The
1967 pay raise, however, was applied to increase the basic pay, but did not
increase the allowances.
	[¶8]  In 1974 Congress enacted legislation to distribute the pay
increases to the BAQ and the BAS.  Act of Sept. 19, 1974, Pub. L. 93-419,
§4, 88 Stat. 1152 (codified at 37 U.S.C. § 1009).  The legislative history of
this enactment suggests that the allowances were considered at that time to
be an important element of compensation and an inducement to enlist in
the modern all-volunteer military.  The purpose of the enactment was
explained in the Letter of the Assistant Secretary of Defense to the
President of the Senate, March 30, 1973:

The President's goal of an all-volunteer force adds a new
dimension to our annual appraisal of the adequacy of military
pay.  Military pay in general may be quantitatively determined to
bear a reasonable relationship to the pay for similar work levels
in the civilian economy.  However, the question of adequacy can
only be addressed in terms of whether military pay levels allow
us to compete successfully in the labor market for the numbers
and quality of individuals which fulfill Department of Defense
manpower requirements. . . .

	. . . .

. . .  [T]he basic characteristic of the present system of limiting
adjustments exclusively to equal percentage increases in basic
pay has caused most members to perceive their allowances at
substantially below actual expenses in the economy.  This
reinforces a basic premise that so long as members of the armed
forces are compensated under a basic pay and allowances
system, it will be necessary to adjust periodically the allowances
for quarters and subsistence in order to ensure that these
elements of compensation are adequate to fulfill their intended
purpose.

reprinted in 1974 U.S. Code Cong. & Admin. News at 5365-66.  
  	[¶9]  Current military pay practices reinforce our view that the BAS,
BAQ and VHA are part of Clukey's regular military compensation.  Clukey
receives the BAS, BAQ and VHA as direct payments in cash along with his
basic pay.  Therefore, unlike traditional fringe benefit plans that involve
employer contributions to employer-provided funds, Clark v. Rust Eng'g Co.,
595 A.2d 416, 420 (Me. 1991), the government "totally relinquishes control
over the [BAS, BAQ and VHA] funds" in Clukey's regular pay envelope.  Ashby
v. Rust Eng'g Co., 559 A.2d 774, 775 (Me. 1989).  Once payment of the BAS,
BAQ and VHA is made, he may spend the allowances when and where he
chooses.
	[¶10]  The fact that the allowances are not considered income for
federal tax purposes or considered in the calculation of retirement or
severance pay is also not controlling.  Our statutory definition of the average
weekly wage is not limited by the federal definition of taxable income. 
Fletcher v. Hanington Bros., Inc., 647 A.2d 800, 803, n. 4 (Me. 1994).  As
we have stated, "[a]n employee's capacity to earn is not reduced by the fact
that portions of the employee's compensation may be exempt from taxation. 
A Congressional decision to tax or not to tax may be based on a variety of
reasons completely unrelated to the employee's capacity to earn."  Id. 
Indeed, in the military pay context, the federal tax advantage pertaining to
the allowances is an element in the definition of the employee's "regular
compensation."  37 U.S.C.A. § 101(25).  Similarly, a Congressional decision
to include a component of compensation in the calculation of retired or
severance pay may also be based on a variety factors unrelated to the
compensatory nature of that pay, and is also not controlling.  10 U.S.C.
§§ 1212, 1401 (1996).
	[¶11]  We give deference to Board interpretations of the Workers'
Compensation Act.  Mushero v. Lincoln Pulp & Paper Co., 683 A.2d 504, 506
(Me. 1996).  Because we conclude that the BAS, BAQ and VHA are a basic
part of Clukey's regular military compensation, the Board's decision to
include those allowances in Clukey's average weekly wage was not error.
	The entry is:
			Decision of the Workers' Compensation Board affirmed.

Attorney for employee: Wayne W. Whitney, Esq. (orally) McTeague, Higbee, MacAdam, Case, Watson & Cohen P O Box 5000 Topsham, ME 04086-5000 Attorneys for employer: Jane E. Skelton, Esq. (orally) Michael P. Friedman, Esq. Rudman & Winchell P O Box 1401 Bangor, ME 04402-1401
FOOTNOTES******************************** {1} The County contends that because the inclusion of the BAQ, BAS and VHA as a fringe benefit would "result in a weekly benefit amount that is greater than 2/3 of the state average weekly wage at the time of the injury," those allowances must be excluded. Because we conclude that the allowances are not "fringe or other benefits" for purposes of subsection (H), we express no opinion concerning this contention. {2} An example of the early view can be found in United States v. Phisterer, 94 U.S. 219 (1876). In Phisterer, the United States Supreme Court denied a serviceman's claim for commutation of quarters while awaiting orders at his home. Id. at 225. The Court stated: Quarters are expected to be furnished by the government to its officers; when it cannot thus furnish, it allows them to be obtained otherwise, and pays a money compensation therefore, called commutation. This is upon the assumption, first, that the officers are actually engaged in the public service; and, second, that such quarters are necessary to the discharge of their duty. Id. at 224.