Hidalgo: Meals and Lodging Needed Further Review Before Setting Disability Pay

If your job takes you from one city to another, employer-paid hotels and meals can be a large part of what keeps the work affordable. After an injury, whether those benefits count as earnings can change the disability-payment calculation. The answer depends on why they were provided and how the arrangement actually worked.

In Hidalgo v. Ducoing Management, Inc., No. ADJ17503090 (WCAB Mar. 25, 2024), the Workers’ Compensation Appeals Board rescinded an award that had included meals and lodging in a laborer’s earnings. It returned the case for further consideration of whether those items were compensation for his work or expenses required by the traveling job, along with a corrected earnings calculation and renewed consideration of the penalty issue.

The worker’s account and the employer’s evidence differed

Javier Hidalgo claimed injury on January 26, 2023. He had been hired about three months earlier and moved between jobsites using company transportation. A foreman arranged the hotels, and Hidalgo shared rooms with other workers.

His testimony summarized in Hidalgo described lodging throughout those three months, including about 15 days when he did not work. He said he never returned home during the employment period and generally received about $300 every two weeks for food. His account supported his argument that the arrangement supplied something beyond the hourly wage.

The employer’s safety and security employee, Stephen Marquez, described an off-site expense policy. According to him, the company arranged lodging and provided a food allowance for work outside Anaheim, but would not provide those benefits for work near Anaheim. He also testified that food payments were tied to days worked.

The employer-witness account in Hidalgo also had limits. Marquez did not handle hiring or payroll, did not pay for the hotels and had not been with Hidalgo at the worksite. He said the company could obtain further lodging information. Those details mattered to understanding which facts he knew directly and which records could clarify the arrangement.

The legal question was whether the benefits were pay or work expenses

Labor Code section 4454 includes overtime and the money value of board, lodging, fuel and other advantages received as part of compensation. It excludes amounts paid to cover special expenses caused by the nature of the employment. An employer’s payment therefore needs to be classified before its value is added to earnings.

The legal framework in Hidalgo applied Burke v. Workers’ Compensation Appeals Board, 74 Cal.Comp.Cases 359, 363 (2009). The relevant factors included whether the item was provided in exchange for services, whether it gave the worker an economic advantage and whether it was provided only while the worker performed employment duties.

For a traveling worker, focus on those actual terms and practices. A payment described as a per diem, a separately issued check or a hotel paid directly by the company needs to be examined in context. Identify what the worker received, when it was available and what job-related expense it covered.

The earnings method was a separate question. The Board looked to section 4453(c)(1) because Hidalgo was hired full time and the wage statement showed more than 30 hours per week in all but one pay period. That provision uses working days per week multiplied by daily earnings for employment of at least 30 hours and five working days per week. The inputs and arithmetic still needed to be established accurately.

The food allowance needed its own explanation

The Board examined the evidence that the food payments were generally $300 for 14 days while Hidalgo worked away from home. Marquez testified that the allowance was for off-site work and would not be paid for work near Anaheim. Hidalgo’s testimony described receiving the same food amount while the hourly-pay checks varied.

The meal-allowance analysis in Hidalgo explained that receiving a per diem on all the jobsites in question was consistent with all those sites being away from home. The record still needed to establish whether the money was compensation giving an economic advantage beyond wages or a special expense of that work.

The Board directed the judge to consider that classification on return. For a similar claim, preserve the allowance policy, hiring communications, wage statements, dates and locations of work, and any payments for days off or local assignments. Those records can show whether the payment followed the services provided, the travel expense or some other agreed arrangement.

The lodging record contained different facts

The foreman selected and paid for hotels or motels near changing worksites. Hidalgo traveled where the foreman took him, used company transportation and shared rooms. At the same time, the evidence showed employer-paid lodging on some days off.

The lodging discussion in Hidalgo called the evidence less clear-cut. The judge needed to consider whether lodging was an expense required by the nature of the employment and whether it provided a bargained-for economic advantage. Payment for a hotel on a day off was part of that record, rather than a substitute for examining the whole arrangement.

A useful lodging record identifies who arranged each stay, who paid, the dates and location, room-sharing requirements and whether the worker could use the accommodation apart from the assignment. Keep any hiring terms together with the actual lodging records. The practical arrangement can be more informative than the label used on an expense entry.

The earnings calculation and penalty returned for further proceedings

At trial, Hidalgo claimed weekly earnings of $1,658.46, while the employer and carrier claimed $620. The January 3, 2024 award set weekly earnings at $1,439.10 and imposed a 15 percent increase on unpaid temporary total disability under section 5814.

The employer challenged the inclusion of meals and lodging, the arithmetic and the penalty. It argued that a good-faith earnings dispute affected the amount of temporary disability owed. The judge’s report recommended correcting the earnings, disability rate, fees and penalty determination while preserving the classification of meals and lodging as compensation. The Board instead required further consideration of the classification as well.

The formal order in Hidalgo granted reconsideration and rescinded the award. The directions on return called for appropriate record development to determine earnings, the temporary-disability rate, attorney fees and the penalty. The original $1,439.10 figure and 15 percent increase therefore require the context of that rescission.

Current section 5814(a) concerns compensation that has been unreasonably delayed or refused. Preserve the rate notices, payment history, calculation requests, supporting documents and responses so counsel can assess both the amount owed and the explanation for the delay. A disputed input and an unreasonable failure to pay need to be evaluated on the actual record.

Organize the compensation terms and actual payments separately

Begin with the hiring terms, hourly rates and wage statements. Then separately identify meals, lodging and transportation: The reason for each item, its value, when it was supplied, who controlled it and what happened on nonworking days. Match that evidence to the carrier’s wage calculation and disability payments.

Our Putman analysis concerns an earnings finding upheld on credible, unrebutted testimony about a signing bonus and other compensation. Here, the conflicting evidence about traveling-work expenses required further examination. Bring the underlying terms and payment records so the review addresses the classification that actually controls your claim.