It’s All About the Money — Recent Developments Regarding the Calculation of Claimant’s Average Weekly Wage

Recently, the Court of Special Appeals of Maryland (CSA) weighed in on the calculation of claimant’s average weekly wage when an employee, hired for full-time employment, involuntarily worked in a part-time capacity in the weeks leading up to his accidental injury. In Richard Beavers Construction, Inc., et al. v. Wagstaff, 2018 WL 1129655 (2018), the CSA held that the Workers’ Compensation Commission properly determined a claimant’s average weekly wage based on the claimant’s anticipated 40 hour work week rather than using the six weeks of actual hours worked, which were involuntarily shortened due to inclement weather.

On April 1, 2013, the claimant sustained a compensable accidental injury after falling through a roof. On May 31, 2013, the Commission ordered the payment of temporary total disability benefits due to claimant’s incapacity to work. Thereafter, a hearing was held on April 16, 2014 to discuss the claimant’s average weekly wage. The employer contended that the average weekly wage was $317.44 based on the average weekly earnings of claimant’s six weeks of employment prior to the accidental injury. Conversely, the claimant asserted that the average weekly wage should be $758.00 based on a 40 hour work week and his agreed-upon hourly rate of $18.95.

At the hearing, evidence was introduced that the claimant was hired as a full-time employee and would work 40 hours per week as long as there was not inclement weather. From the time the claimant was hired until the date of the accidental injury, the only days the claimant did not work were due to inclement weather. On those days, the claimant was instructed not to show up for work. Following receipt of all evidence, the Workers’ Compensation Commission issued a decision finding the claimant’s average weekly wage to be $758.00 and adjusted the claimant’s temporary total disability compensation rate accordingly.

The employer appealed to the Circuit Court for Talbot County and, on October 19, 2016, oral arguments were held on the issue of law. Shortly thereafter on November 2, 2016, the Circuit Court affirmed the Commission’s April 16, 2014 decision holding that it was reasonable to conclude that the Claimant was promised $758.00 per week, that this figure represented an expected increase in salary and, consequently, the claimant’s average weekly wage was $758.00. An appeal was subsequently filed by the employer to the CSA.

Following arguments by the claimant and employer and insurer, the CSA affirmed the decisions of the Commission and Circuit Court for Talbot County. In support, the CSA held that the Commission is not required to calculate average weekly wage using the actual earnings from the period before an accident where:

  1. An employee was hired to work full-time;
  2. The claimant sustained an accidental injury a short period after being hired;
  3. The claimant worked substantially less than 40 hours per week during the shortened period; and
  4. Questions exist as to whether the claimant’s actual hours worked accurately represent the Claimant’s normal working hours.

Despite the decision in Wagstaff, it is important to recognize that the CSA’s holding is limited to a very narrow fact pattern. In Wagstaff, the claimant was hired to work in a full-time capacity but, due to circumstances outside of his control, only worked in a part-time capacity for a brief period of time until the claimant’s accidental injury. Looking ahead, Wagstaff will likely lead to an increase in average weekly wage disputes. With this in mind, employers and insurers must be vigilant in investigating the details of claimant’s employment. If a full-time employee is working in a part-time capacity prior to an accidental injury, the employer and insurer must evaluate the reason for the part-time employment and whether it was due to circumstances within the control of the employer. This investigation may make or break the employer’s defense and assist in reducing the claimant’s average weekly wage and exposure of the claim.

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