Fifth Circuit: Per Diem Was More Akin to Wages In This Case

The Fifth Circuit recently issued an unpublished Longshore and Harbor Workers’ Compensation Act (“LHWCA”) decision.  Decedent, an electrician  from Warren, Texas, suffered a fatal heart attack while working on a drilling rig in Vicksburg, Mississippi.  At the time of his death, he worked twelve-hour days seven days a week.  Decedent was staying at a motel and he received $50 per diem for each day worked in Vicksburg.   Following his death, Decedent’s widow made a claim for death benefits.  The parties put two issues before the Administrative Law Judge: (1) whether the Section 20(a) presumption applied to the case, and (2) the correct amount of per diem to include in the Decedent’s average weekly wage (“AWW”) calculation.

As for the Section 20(a) issue, the Fifth Circuit determined that the statutory presumption did, in fact, apply.  The presumption applies after a claim establishes a prima facie showing of a work injury.  To make such a showing, a claimant must prove that (1) he suffered a harm and (2) a condition of the workplace that could have caused, aggravated, or accelerated the harm.  Here, Decedent’s heart attack was a “harm” and his working conditions (i.e. climbing stairs, carrying equipment, and living away from family) could have caused, aggravated or accelerated the harm. 

As for the per diem issue, the Fifth Circuit determined that the entire $50 per diem was included within the AWW.  Previously, the Fifth Circuit has included non-taxable compensation as wages.  In B & D Contracting, the court included per diem payments as “wages” when the payments “played the role of money wages.”  The court asked whether the payments:

[W]ere calculated based on the number of hours worked; they were paid in the same paycheck as the employee’s normal wages; the per diem was an unrestricted payment, unrelated to actual costs of meals, lodging, or travel; the same per diems was paid to all employees regardless of where they live; and the per diem constituted almost half of [the employee's] gross pay.

Here, the per diem payments were disbursed for days actually worked; the payments were made in cash at the same time as the paycheck; the employees did not have to substantiate any expenses prior to receiving the per diem amount; and the payments were not included in W-2 statements.  The court reasoned that these per diem payments were more closely akin to wages than compensation of expenses.

Gonzales Elec. Sys. v. Dir., OWCP, No. 12-60116, 2012 WL 5374162 (5th Cir. Nov. 2, 2012).

Jon Robinson
As a Member at Mouledoux, Bland, Legrand & Brackett, Jon Robinson focuses his practice on the representation of employers and carriers in matters arising under the Longshore and Harbor Workers' Compensation Act, the Defense Base Act, and the War Hazards Compensation Act. He can be contacted at (504) 595-3000 or by e-mail at jrobinson@mblb.com.
Jon Robinson