Benefits Calculation To Change for Seasonal Workers
By Jerry P. Cline
The Ohio Supreme Court recently closed a substantial loophole in workers’ compensation law regarding the calculation of benefits to seasonal workers. As most employers know, the Bureau of Workers’ Compensation bases much of its benefits package on an injured worker’s earnings prior to injury. The average weekly wage, or AWW, is the key component to this calculation. To determine the AWW, the Bureau simply totals up the wages earned in the 52 weeks prior to injury, and divides by 52. This number, the AWW, is then used to calculate temporary total disability benefits, permanent partial disability benefits and just about every other benefit pertaining to lost wages. If the injured worker is “involuntarily unemployed,” those weeks of unemployment are excluded from the calculation.
It is therefore significant that before the recent decision, seasonal worker wage calculations excluded months not worked due to seasonal layoffs. In effect, a seasonal worker’s AWW was artificially inflated because it reflected only the months worked and not the months that they may have chosen not to work due to the seasonal nature of the job.
To put this into perspective, consider a seasonal construction worker who earns $500 per week and works 35 weeks out of the year. He has been laid off from December 1st until March 31st (17 weeks) every year for the past five years. During the lay-off periods, the construction worker has expressed no interest in obtaining temporary employment until rehire on April 1st. Now assume the same worker gets hurt on the job on November 30th, and remains out of work indefinitely. The Bureau must assess the AWW for the 52 weeks prior to injury, but our worker was laid off for 17 of those 52 weeks. Hitherto, the Bureau would have excluded the 17 weeks the injured worker was laid off and divided the total by only 35 weeks. The worker would actually have earned $17,500 for the year in question ($500 x 35 weeks) for a true AWW of $336.54, but the Bureau would have excluded the 17 lay-off weeks and divided $17,500 by only 35 weeks for an AWW of $500. Thus, injured workers matching this description were receiving windfalls of 33% more than they were entitled to.
However, in Baker Concrete Construction, the Court ruled that when calculating AWW for seasonal employees, the number of weeks used in the calculation turns on whether the claimant's unemployment (weeks of $0 income or income derived from unemployment benefits) was a "lifestyle choice." To determine a lifestyle choice, the Industrial Commission should look to the intent of the injured worker as well as to the words, actions or patterns established by the injured worker both before and during the claim.
As the Supreme Court stated, "if seasonal unemployment springs from a lifestyle choice, then those weeks of unemployment are not beyond a claimant’s control and omitting those weeks from the AWW contradicts both the statute and the case law." Therefore, if it can be shown that an injured worker’s repeated unemployment from his seasonal occupation is a lifestyle choice, employers can include those weeks of $0 income in the AWW calculation, thereby reducing the AWW average and the risk assessed to the employer’s workers’ compensation insurance experience.
Jerry and the Workers Compensation unit are always looking for ways to help you save on your bottom line. They can be reached at any time for assistance with all your questions and concerns.