CALCULATING AVERAGE WEEKLY WAGE: THE NON-CONVENTIONAL WORKER
The average weekly wage (AWW) calculation in Workers’ Compensation is, arguably, the most important aspect of a case where a claimant lost time from work. The AWW is the foundation of a claimant’s compensation rate in New York claims and, as such, carriers must take great care in getting a claimant’s AWW right in order to save money during the temporary benefits-phase of a claim and schedule loss of use/permanency awards.
In general, the AWW is a simple calculation: the employer/carrier totals claimant’s gross wages for the one-year period prior to claimant’s date of accident, divides that sum by 52 weeks, and the resulting figure is claimant’s AWW. In cases where the claimant did not work for a full year prior to the date of injury, the employer/carrier can use the gross annual wages of a similar worker. In that regard, the AWW calculation is straight-forward for claimants working full-time or part-time jobs year-round.
Issues in calculating the AWW arise when claimants are employed in seasonal positions with customary periods of unemployment, such as the employees of a waterpark that is only open during the summer months. Law Judges tend to use more discretion in setting the AWW in such cases. For example, the firm has seen Law Judges divide a claimant’s gross wages by the number of weeks claimant actually worked; however, Sobel Pevzner, LLC as do all carrier’s attorneys reject this method of calculation as it ignores the periods of unemployment and results in a higher AWW. Instead, the firm typically argues that the denominator in the equation should be 52, as in “52 weeks” which takes into account the claimant’s periods of seasonal unemployment, resulting in a lower AWW, and ultimately, lower exposure to the carrier.
Such an issue was brought before the Board Panel in Matter of Wappingers Central School Dist. 2017 Wrk. Comp. LEXIS, G120 1559, W204002. In Wappingers, claimant worked a total of 42 weeks prior to the date of accident. At the hearing level, the Law Judge divided claimant’s gross wages by 42 weeks and the resulting figure established claimant’s AWW. The carrier appealed the Law Judge’s Decision. In its Memorandum of Decision, the Board Panel determined that in cases involving a seasonal employee, a claimant’s AWW will be calculated by using the number of days a claimant actually worked if the claimant worked more than 200 days. In Wappingers, the Board Panel used a 210-day divisor in calculating claimant’s AWW.
The Board Panel Decision in Wappingers provides some guidance in cases involving seasonal workers, however, another problem can arise in claims involving claimant’s with intermittent periods of unemployment, contractual employment, or temporary employment. In particular, cases involving construction workers, contractors, or union labor workers hired by employers on a project-by-project basis can pose a challenge to carriers in calculating a fair AWW. Typically, employers who regularly hire intermittent workers may have only a few weeks-worth of payroll records at a time for any employee, making it difficult for the employer to produce a similar workers’ payroll.
In cases where a claimant’s AWW cannot be reasonably or fairly determined, the New York Workers’ Compensation Law Sections 14(1), (2) provides the Board with the authority to determine claimant’s AWW from other sources including the earnings of employees in the same or similar job class as claimant in an area near the place of injury. The New York Department of Labor provides statistics on average earnings of industrial jobs throughout the State and is a great practitioner’s tool when litigating the intermittent worker’s AWW in a case where the earnings of a similar worker are unavailable. See New York Workers’ compensation Handbook, ch. 5, § 5.21[4] (Matthew Bender, 2016).
The establishment of an over-estimated or inaccurate AWW for the unconventional worker can prove costly for carriers and self-insured employers and should not be overlooked or taken lightly at any stage of the claim. Although establishing an AWW for seasonal or intermittent workers is subject to discretion by the Board, the opinion in Wappingers and the NY Department of Labor’s earnings statistics provide some guidance for the carrier in calculating a fair and accurate AWW, together with providing defense counsel with some convincing arguments when litigating the AWW issue.