When dealing with claims of injured workers under the age of 25, the wage expectancy statute of New York’s workers’ compensation law looms overhead that first time you calculate the claimant’s wage at the time of injury. While it does not apply in every instance, there are some ways to effectively avoid pitfalls. One major key to your defense is setting up a game plan as early as possible.
The wage expectancy provision of the workers’ compensation law was enacted in recognition of the fact that a minor’s wages are generally less than those of an adult in like employment. The statute was implemented to more accurately reflect the increase towards adult wages, which would normally come to the injured employee with years, efficiency, and skill in the consideration of future wage loss for employees who were under the age of 25 at the time of injury.
Some key points to consider:
1. Wage expectancy rates are typically only applied towards permanent awards, with some exceptions.
As a general rule, the board may consider future wage expectancy only when calculating an award for a permanent disability, and not as a temporary award pending permanency. This has been consistently upheld when permanent awards have been directed at classification with a loss of wage earning capacity.
However, there is a caveat as it pertains to sites or areas of injury subject to schedule loss of use findings.
The Third Department in Matter of Dinger v. K-Mart Corp., 246 A.D.2d 946, 947 (3d Dept.1998) held that at the time of a schedule, periods awarded at temporary total rate (per the claimant’s established average weekly wage) remain a credit to the carrier, with only the balance due at the wage expectancy rate. However, the Third Department subsequently held on Matter of Fox v. Crosbie-Brownlie, Inc. 284 A.D.2d 42, 44 (3d Dept. 2001) that where a claimant was paid at a moderate temporary partial disability rate, the entire award should have been paid at the wage expectancy rate.
As the latter holding was based upon the temporary awards being made at a partial rate, rather than a total rate, there is still an argument to be made that the wage expectancy rate should not be retroactively applied to a temporary total award when calculating a schedule award. The board has subsequently issued decisions on both sides of this coin. In Future Home Technologies, No. 30305996, 2012 WL 4040511, the board found that wage expectancy, if proper, vests only at the date of permanency and is not retroactive to periods prior to a finding of permanency. But in Ey Feldman Trading Inc., No. G1775147, 2019 WL 1585923, the board found that the wage expectancy rate should apply to the entire schedule loss of use award, including periods designated as temporary total.
2. Wage expectancy is calculated based upon what the claimant likely would have earned should he or she have continued working in the same employment through age 25.
Absent atypical circumstances, the board is to take into consideration the expectancy of increased wages based upon possible advancement and increased earning capacity in the same or similar employment that the claimant was in at the time of his or her injury.
For this purpose, the board is precluded from considering actual wages in effect after the claimant was injured, and employments other than those in the claimant’s field of work when injured. The board is obligated to determine, with testimony, whether or not the claimant would have been promoted to a management or supervisory position by age 25, taking into account the number of years the claimant would have had by age 25 had he or she not been injured. This is easiest if there is another employee in the same job function aged 25 years or older, with similar experience as the claimant.
A claimant will generally not be entitled to an increase in average weekly wage per wage expectancy where there is demonstrated lack of promotional opportunities. Because of this, it is important to obtain this information as early as possible in a case when you discover the claimant is under 25.
3. Care should be taken to consider possible pitfalls in this area for an “atypical” circumstance where wage expectancy can be calculated at a higher rate; most often, this occurs when the claimant is enrolled in higher education while at the pre-injury job.
Another area of concern is where a worker is injured at a position that is not expected to be their lifelong career, particularly in cases where the claimant is receiving an education to seek a higher-paying position.
For instance, the Third Department has found it unfair to apply the salary of a “newspaper boy” to wage expectancy, as one is rarely expected to continue in this particular same employment. The court has similarly found it unfair to apply the salary of a temporary job working as a baker while the employee was enrolled in nursing school, or the salary of a part-time job as a nurse’s aide while enrolled in college to prepare for medical school. The court determined that these part-time positions did not accurately reflect the claimant’s “true earning capacity.”
In contrast, the board has found that an atypical circumstance did not exist when the claimant was not enrolled in a college or other course at the time of injury.
In sum, asking your client early on in the case about promotions available within the claimant’s employment capacity, other employees aged 25 years or older at the company, and who might be best suited to provide this testimony will go a long way towards avoiding a headache at permanency.