In the vast majority of workers' compensation claims, the issue of Average Weekly Wage is not contested or litigated and, often, the employer/insurer's counsel does not even submit a wage statement as part of their exhibit packet. In most cases this is not a problem; however, in some situations it can mean the difference of thousands of dollars in indemnity benefits to your client. Blind reliance on the Employer/Insurer's fourteen (14) week wage statement can result in injustices for injured workers. For this reason, it is important to know what tools we, as claimant's attorneys, have at our disposal to ensure a proper and fair calculation of a client's Average Weekly Wage. Two recent 2018 cases from the Court of Special Appeals highlight these opportunities: Richard Beavers Construction, Inc. v. Wagstaff, 236 Md.App. 1 (2018) and Stine v. Montgomery County, MD, 237 Md.App. 374 (2018).
The Basics: L&E 9-602(a) and COMAR 14.09.03.06
Before delving into Wagstaff and Stine, let us briefly review the language from the Workers' Compensation Act dealing with Average Weekly Wage. Md. Code Ann., Lab. & Empl. Sec. 9-602(a) states:
Except as otherwise provided in this section, the average weekly wage of a covered employee shall be computed by determining the average of the weekly wages of the covered employee:
- (i) when the covered employee is working full time; and
- (ii) at the time of:
- the accidental personal injury; or
- the last injurious exposure of the covered employee to the hazards of an occupational disease.
For purposes of a computation under paragraph (1) of this subsection, wages shall include:
- (i) tips; and
- (ii) the reasonable value of housing, lodging, meals, rent, and other similar advantages that the covered employee received from the employer.
If a covered employee establishes that, because of the age and experience of the covered employee at the time of the accidental personal injury or last injurious exposure to the hazards of the occupational disease, the wages of the covered employee could be expected to increase under normal circumstances, the expected increase may be taken into account when computing the average weekly wage of the covered employee under paragraph (1) of this subsection.
Pursuant to its regulatory powers, the Workers' Compensation Commission (hereinafter "the Commission") enacted COMAR 14.09.03.06 in order to streamline the process of determining the Average Weekly Wage for a claim. This regulation has resulted in the "Fourteen (14) Week Wage Statement" that all workers' compensation practitioners have become familiar with. However, it is important to note (and is of particular relevance to the Court of Special Appeals' decision in Stine) that this regulation only places a requirement on the employer/insurer to file the wage statement "as soon as practicable". It does not create any sort of presumption and definitely does not limit the Commission's discretion under the statute to find a different Average Weekly Wage than proffered by the Employer/Insurer. COMAR 14.09.03.06 states, in pertinent part:
- A. Preliminary Determination. For the purpose of making an initial award of compensation before a hearing in the matter, the Commission shall determine the claimant's average weekly wage from gross wages, including overtime, reported by the claimant on the employee's claim form.
- B. Filing of Wage Statement. As soon as practicable, the employer/insurer shall file a wage statement containing the following information:
- The average wage earned by the claimant during the 14 weeks before the accident, excluding the time between the end of the last pay period and the date of injury, provided that periods of involuntary layoff or involuntary authorized absences are not included in the 14 weeks;
- Those weeks the claimant actually worked during the 14 weeks before the accident;
- Determination at First Hearing.
- Calculation of the average weekly wage shall be adjudicated and determined at the first hearing before the Commission.
- All parties shall be prepared to produce evidence from which the Commission can determine an accurate average weekly wage at the first hearing.
As gleaned by Subsection A and C (2), as well as appellate case law, this regulation in no way binds the Commission to utilize only the employer/insurer's fourteen (14) week wage statement. Although the Employer/Insurer will often argue that calculation of AWW using only the fourteen (14) weeks is mandatory, the language of the statute, as well as the Regulation itself, suggests otherwise. Moreover, a regulation cannot be read to conflict with, let alone override a statute - (e.g. see Dep't. of Soc. Servs. v. Russell, 159 Md. App. 594, 611 (2004) wherein the Court of Special Appeals stated: "[w]here the language of a statute differs from relevant language in a departmental regulation, the statutory language must control." (emphasis added). For these reasons alone, the fourteen (14) week wage statement provision in the COMAR Regulations does not bind the parties or the Commission to a particular average weekly wage.
The language of COMAR 14.09.03.06 has the potential to lead to confusion as is evident by the Circuit Court's original decision in Stine. For example, the Circuit Court found, after reviewing this same COMAR provision, that "there's only one way to determine it; it is you look at the 14 weeks before the accident, and then it talks about a couple other things, but that's where I believe that the COMAR and the Commission was restricted to find." As set out below, this mistaken interpretation was reversed by the Court of Special Appeals.
The Facts - Stine
On March 26, 2016, Mr. Stine, who was a volunteer emergency medical technician (EMT) for Montgomery County, MD fell while stepping off of his assigned ambulance and injured his right foot and ankle. He was transported to the Emergency Department where he was diagnosed with a fracture, was splinted, and subsequently discharged. He underwent surgery on the ankle approximately a month later and was out of work for a couple months.
As a volunteer for a "fire or rescue company," Mr. Stine's Average Weekly Wage was governed by Lab. & Employ. Art. 9-602(g) , which directs the Commission to look to his wages earned by "other employment." In addition to volunteering as an EMT for the County, Mr. Stine worked part-time for LifeStar Response as a private EMT during the school year (he was also a college student) and full-time during his summer breaks. Consequently, for the purposes of Sec. 9-602(g), his LifeStar wages counted as the wages earned from "other employment".
Sec. 9-602(g) states: "(g)(1) Subject to paragraph (2) of this subsection, for the purpose of computing the average weekly wage of an individual who is a covered employee under § 9-234 of this title, the wages of the covered employee shall be:
- (i) for a covered employee who received a salary or wages from other employment at the time of the accidental personal injury or last injurious exposure, the salary or wages from the other employment; or
- (ii) for a covered employee who did not receive a salary or wages from other employment at the time of the accidental personal injury or last injurious exposure:
- if the covered employee derived income from a source other than salary or wages at the time of the accidental personal injury or last injurious exposure, an amount that allows the maximum compensation under this title;
- if the covered employee was not engaged in a business enterprise at the time of the accidental personal injury or last injurious exposure, the weekly income last received by the covered employee when engaged in a business enterprise; or
- if the covered employee had never been engaged in a business enterprise at the time of the accidental personal injury or last injurious exposure, an amount that allows the minimum compensation under this title."
As previously mentioned, Mr. Stine was also a full-time college student working on a nursing degree, which is why he could only work part-time for LifeStar during the school year. As a result, his weekly wages earned during the school year were less than what he earned during the summer- e.g. his fourteen (14) week earnings prior to the March 26, 2016 were not representative of what he earned over the full year.
After a hearing before the Commission in July 2016 on the issue of Average Weekly Wage, the Commission found Mr. Stine's Average Weekly Wage to be Sixty-Four Dollars and Sixty-Five Cents ($64.65), which was the gross weekly average of the wages earned by Mr. Stine for the fourteen (14) weeks preceding his March 26, 2016 work-injury when he worked only part-time for LifeStar. Mr. Stine thereafter took a de novo appeal to the Circuit Court for Montgomery County to present evidence on two alternative theories: (1) that the Commission should have utilized a fairer fifty-two (52) week time period to determine his average weekly wage based off his yearly earnings rather than just when he was working part-time; or (2) that because of his age and experience, Sec. 9-602(a)(3) allowed for a finding of an Average Weekly Wage consistent with Mr. Stine's anticipated wages since his wages with LifeStar Response were "expected to increase under normal circumstances."
The Circuit Court Proceedings
Mr. Stine requested a de novo petition for judicial review and a jury trial before the Circuit Court for Montgomery County. A de novo review permits a party to present more, less, or the same amount of evidence than was presented before the Commission. See Bd. of Educ. for Montgomery Cty. v. Spradlin, 161 Md. App. 155, 193, 867 A.2d 370, 393 (2005). To this end, Mr. Stine presented two separate and additional types of evidence, each in support of his two alternative theories.
In regards to his first theory -of utilizing the entire fifty-two (52) weeks rather than just the fourteen (14) weeks prior to his injury- Mr. Stine presented evidence of his yearly wages, via his 2015 W-2 Form. It showed his wages earned throughout the year, both when working full-time in the summer months and part-time in the school year. We argued that since he was injured in March, during the school year, his fourteen (14) week average weekly wage was not an accurate representation of his earning capacity at the time of the injury. On the contrary, a broader fifty-two (52) week period would have led to a more accurate calculation of his average wages. Alternatively, if the Court were to account for only his wages when "working full time" during the summer, it would be more in compliance with the explicit language of Sec. 9-602(a)(1).
With regard to his second theory - because of his age and experience his average weekly wage should be what he was expected to earn in the future - Mr. Stine retained a vocational expert. The testimony proffered was what his average weekly wage was "expected to increase" to upon completion of his nursing degree or while working as a full-time EMT, pursuant to Sec. 9-602 (a)(3).
Prior to trial, Montgomery County moved in limine to exclude the vocational expert on the grounds that Sec. 9-602(a)(3) was not applicable as Sec. 9-602(g) exclusively governed this case. The Circuit Court granted this motion. Next, the County moved to strike Mr. Stine's jury demand arguing that the issue of average weekly wage was a legal question alone. The Circuit Court also granted this motion finding that the Commission was "restricted to find" the average weekly wage was only based upon the fourteen (14) week period prescribed in COMAR. In the alternative, the Circuit Court also stated that, even if COMAR permitted other evidence, the Commission did not abuse its discretion in ignoring it. Mr. Stine thereafter took an appeal to the Court of Special Appeals. After the Circuit Court's judgment, but prior to oral argument, the Court of Special Appeals handed down the Wagstaff decision touching upon the same average weekly wage issue.
The Wagstaff Decision
In its Stine decision, the Court of Special Appeals had the opportunity to revisit and expand on its recent decision in Richard Beavers Construction, Inc. v. Wagstaff, 236 Md.App. 1 (2018), which was issued after the Circuit Court's judgment in Stine, but before oral arguments. Both cases involved situations which exemplified why, in some instances, an employer/insurer's wage statement does not result in a just or accurate average weekly wage calculation for an injured worker and why claimant's counsel has to be vigilant in exploring all possibilities.
Wagstaff concerned an injured worker who was injured six weeks into his employment. Although he had been hired to work forty (40) hour week, during the first six weeks of his employment he never worked a full forty hours as inclement weather prevented a full work week. The employer submitted a six-week wage statement which calculated his average weekly wage based upon those six shortened weeks. The claimant countered that his average weekly wage should be based upon what his wages would have been for a full forty (40) hour week for which he was hired to work. The claimant prevailed before the Commission and in the circuit court on summary judgment.
The employer/insurer thereafter appealed to the Court of Special Appeals arguing that both the Commission and the circuit court erred in ignoring, what the employer/insurer believed to be, the "plain reading" of Labor & Employ. Sec. 9-602(a)(1) and COMAR 14.09.03.06. In their incorrect reading, the employer/insurer argued that the average weekly wage could only be determined based upon "wages actually earned." The Wagstaff Court stoutly refused to go along with the employer/insurer's interpretation and, in refuting this analysis, highlighted the benevolent purposes of the Workers' Compensation Act:
"Little imagination is needed to think of scenarios in which an inflexible requirement tying an injured employee's compensation to pre-accident earnings would subvert the goal of compensating employees for lost earning capacity. Suppose that, immediately after an employee's first day of full-time work, an event such as a natural or manmade disaster shut down the place of employment for a few weeks, in which the new employee received no pay; then, immediately upon the employee's return, the employee became disabled in a workplace injury. In such a scenario, an average of actual earnings during the weeks before the injury would not accurately represent what the employee normally would earn from that employer under the contract that was existing at the time of the injury. This unfortunate employee would certainly suffer financial hardship if the employee's compensation were strictly computed by dividing the actual gross earnings by the number of weeks since being hired. In many situations involving recently-hired employees, the rule proposed by RBCI and its insurer would violate the principle that the Act should be construed "to afford substantial, and not merely nominal, relief[.]" Merrill v. State Military Dep't, 152 Md. at 478, 136 A. 897."
Wagstaff, 236 Md. App. 1, 20, 180 A.3d 211, 222–23 (2018)
As a result, the Court held that, in determining a claimant's average weekly wage, the Commission is not confined to only using the actual wages of the injured worker during the weeks preceding the date of injury, but may look to what the claimant would have earned during those same weeks if not for circumstances outside the worker's control such as weather or sickness. Put simply, the employer/insurer's wage statement is not the final word on the average weekly wage of a claim. The Wagstaff opinion reminds us that the employer/insurer's wage statement is just one in several pieces of evidence that may be presented to the Commission and by no means establishes any sort of "presumption." To this point, the Stine Court not only highlighted, but further enhanced this principle.
The Stine Decision
The Stine Court split its opinion by reversing the Circuit Court on its flawed interpretation of the COMAR fourteen (14) week "rule" and remanding the case back for a jury trial (thereby reaffirming that average weekly wage is a factual issue ripe for submission to a jury which the claimant properly requested). This last point has possible implications for de novo requests for jury trials, discussed further below. Despite ruling in favor of the claimant on this issue, the Stine Court also, however, affirmed the Circuit Court's exclusion of Mr. Stine's vocational expert stating that, at least here, Sec. 9-602(a)(3) was not applicable.
First, the Stine Court found that the Circuit Court erred by denying Mr. Stine's request for a jury trial. Once again, on appeal to the Circuit Court, the Claimant had requested a de novo judicial review and jury trial. In addition to his vocational expert, Mr. Stine sought to present his fifty-two (52) week W-2 form as more reliable evidence of his average weekly wage to a jury. As mentioned above, parties on appeal from the Commission may introduce more, less, or the same evidence than at the underlying Commission hearing. By striking his jury trial demand and finding that the issue of the time period used to calculate an average weekly wage (ie. fourteen (14) weeks versus fifty-two (52) weeks) was a legal determination, the Circuit Court denied Mr. Stine the opportunity to do that. The Court of Special Appeals appropriately found this to be a mistake and appropriately reversed this judgment:
"First, we disagree that COMAR 14.09.03.06 compelled the Commission to calculate the average weekly wage from a fourteen-week sample. As we recently clarified in Wagstaff (which was decided after the circuit court's decision), that regulation "does not purport to restrict the Commission in any manner from utilizing a different time period [than fourteen weeks] if the Commission deems it appropriate to do so." 236 Md. App. at 24–25, 180 A.3d 211 (quoting Gross v. Sessinghause & Ostergaard, Inc., 331 Md. 37, 50, 626 A.2d 55 (1993) ). And indeed, the regulation contains nothing requiring the fourteen-week time period in all cases… the regulation does not restrict the determination of average weekly wage to that time period, and allows the Commission to consider other evidence in setting the average weekly wage at a hearing, if one is held. COMAR 14.09.03.06(C); see Wagstaff, 236 Md. App. at 24–25, 180 A.3d 211. (emphasis added)"
Stine v. Montgomery Cty., 237 Md. App. 374, 386–87, 185 A.3d 826, 833–34 (2018).
Moreover, the Court found that this issue is factual in nature and so the Claimant's request for a jury trial must be honored. As such, the issue of whether the fourteen (14) weeks or the fifty-two (52) week periods should be used as a basis for his average weekly wage was remanded back to a jury trial. In a statement that has implications far beyond just the average weekly wage issue, the Stine Court stated:
"Mr. Stine had filed his petition for judicial reviews, then a request for a jury trial, which transformed the procedural posture of the case to an essential trial de novo, which means the Commission's decision was not subject to review by the circuit court."
Id at 388, 835.
With regards to the Court affirming the Circuit Court's decision to exclude Mr. Stine's vocational expert, the Court held that because Mr. Stine, as a volunteer EMT, fell under Sec. 9-602(g), a special subsection applicable only to volunteer fire fighters, EMTS and paramedics, and this subsection "does not contain any language referring back to the computation method or principles outlined in (a)." Consequently, Mr. Stine's evidence (i.e. expert testimony) that his wages were "expected to increase" due to his anticipated nursing degree and hands-on work experience as an EMT for both LifeStar Response and Montgomery County were not applicable under these circumstances. Importantly, the Court did not indicate that this testimony would not otherwise be relevant if this case had not fallen under subsection (g)'s narrow application to volunteer EMTs. In other words, this opinion does not preclude another claimant from utilizing similar vocational expert evidence under subsection (a)(3).
Conclusion: The Implications of the Stine and Wagstaff Decisions
The most important takeaways from Stine and Wagstaff involve the ability of the Commission to consider any and all kinds of evidence relevant to the issue of average weekly wage. It is not bound to the fourteen (14) week wage statement. The Employer's Wage Statement is just one piece of evidence among many that might be presented. Moreover, even when utilizing the wage statement, it might not accurately represent the claimant's earning capacity if it does not account for days missed due to inclement weather, illness or other situations which preclude an employee firm working full time. Beyond that, the Commission can utilize other time periods, such as a fifty-two (52) week period represented by a tax return or W-2 Form, in determining a more reliable and fair average weekly wage.
The Stine opinion also illuminates one more important principle that goes beyond just the average weekly wage issue and covers any de novo workers' compensation appeal. Put simply, where a party requests a de novo judicial review and a jury trial on any disputed factual issue, the circuit court must proceed with a jury trial on that factual issue.