Los Angeles Turf Club, Inc. v. Unemployment Insurance Appeals Board

Opinion

SPENCER, P. J.— Introduction

Defendants California Unemployment Insurance Appeals Board and Martin R. Glick, Director of the Employment Development Department (Department), appeal from a judgment in which the trial court ruled that plaintiffs were entitled to a refund of taxes on the ground that certain lump-sum payments made to qualified seasonal employees were vacation pay excluded from taxation pursuant to Unemployment Insurance Code section 1265.5.

Statement of Facts1

The Federation of California Racing Associations, Inc. (Federation) negotiates statewide union contracts with the Pari-Mutuel Employees [457]Guild of California, Local 280, Service Employees International Union, AFL-CIO (Local 280) and with Local 495 of the Teamsters Union. The plaintiffs are all signatories to these industrywide master contracts.

There are 24 annual horse racing meets in California, varying in length from 8 to 79 racing days, and in some cases, covering overlapping time periods. Potentially, a seasonal race track employee in southern California can work up to six racing meets a year. During each racing meet, each plaintiff uses the services of various seasonal employees, most of whom are pari-mutuel clerks. Under the provisions of the collective bargaining agreement, Local 280 determines the seniority of each union member. Before each racing meet, the prospective employer submits a manpower requisition to Local 280 which is filled on a seniority basis from those union members requesting employment.

Pursuant to the terms of Local 280’s collective bargaining agreement, plaintiffs are required to make lump-sum payments termed “vacation pay” promptly at the end of each racing meet to qualified employees. Only those employees designated as “regular,” as opposed to “extra,” employees qualify to receive the lump-sum payments. “Regular” employees are identified as those working more than 60 percent of the racing days during a particular racing meet. In essence, “regular” seasonal employees depend on the racing industry for their livelihood and do not seek work outside of the industry.

As a general rule, these employees do not take vacations during the racing meets in which they participated. However, an employee may vacation during a racing meet and still receive his lump-sum payment at the end of the meet. If an employee chooses to take a vacation during a racing meet in which he is participating, he is not compensated for the days taken and does not earn credit toward the 60 percent work requirement. Should an employee be felled by illness or otherwise unable to work due to circumstances beyond his control, he does receive credit toward the 60 percent requirement.