Court: Add tips to pay in workers comp claim

CARSON CITY - Tips earned by employees must be added to their regular pay when calculations are made for their workers compensation payments, the Supreme Court decided Thursday.

In a 7-0 vote, justices said Sierra Nevada Administrators must add in tips earned by Asen Negriev in figuring his workers compensation, even though he failed to pay federal income taxes on his tips.

A bartender, Negriev suffered an industrial injury when he slipped and injured his back on Nov. 1, 2006, when walking into the kitchen at the Big Inning Sports Pub in Las Vegas. He was making $8 an hour for working at the bar, along with any tips he received. Negriev each day reported this tips to his employer, but he did not declare them on his federal tax returns.

After the accident, Sierra Nevada Administrators failed to include tip income when it figured how much in was due in monthly disability payments for his injury. That lowered his checks.

An appeals officer later ordered Sierra to recalculate his payments to include the tips. Sierra then appealed to the district court and lost. It then appealed to the Supreme Court.

Justices said state law is clear: Tips must be included in figuring disability payments, even though the employee did not include them in his income tax payments..

" whether an employee actually paid taxes on the tip income is irrelevant to the average monthly wage calculation, as long as the employee reported the tips to his or her employer," wrote Justice Mark Gibbons.

If he had not reported the tips to Big Inning, then Gibbons added he would not be entitled to a higher disability calculation.

The failure of Negriev to pay his taxes "is a matter between the employee, the state and the federal government," according to the decision.

Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.