BENEFIT BOOSTERS: HOW TO INCREASE YOUR CLIENT’S WORKERS’ COMPENSATION RATE
In the typical worker’s compensation case, the rate of benefits that an injured worker receives is based on a percentage of his/her average weekly wage up to a statutory weekly maximum amount.
There are however many atypical factual situations wherein a claimant’s rate of weekly compensation may be increased or “boosted” by virtue of an understanding and utilization of various sections of General Law, Chapter 152. All parties to a compensation claim should have an awareness of the existence of these sections and the case law interpreting them.
The following materials will examine the relevant statutory provisions, the leading Reviewing Board and Appellate Court decisions, and will contain one or more hypothetical fact patterns to illustrate the application of the section or principal involved.
Since the employee’s average weekly wage at the time of injury dictates the rate of weekly compensation, we will begin by looking at ways to increase the average weekly wage of the injured employee.
AVERAGE WEEKLY WAGE ISSUES
- General Law, Chapter 152 defines “Average Weekly Wages” as the
“Earnings of the injured employee during the period of twelve calendar months immediately preceding the date of injury, divided by 52, but if the injured employee lost more than two weeks’ time during such period, the earnings for the remainder of such twelve calendar months shall be divided by the number of weeks remaining after the time so lost has been deducted. . .”
Example:Jack Hammer, an employee of ABC, Inc., was injured on October 20, 2000. During the period between October 20, 1999 and October 20, 2000 he worked 47 weeks and earned $31,584.00. His average weekly wage would be $672.00 ($31,584.00 ÷ 47). If, however, he worked 50 weeks and earned the same gross amount, his average wage would be $607.38 ($31,584.00 ÷ 52).
Obtain a Wage Schedule from the insurer and make sure the gross wage was divided by the proper number of weeks.
Seasonal employee’s, however, do not fare as well under the definition of average weekly wage, particularly as to what is meant by “lost more than two weeks’ time…”
In the case of Bunnell v. Wequasset Inn, 12 Mass Workers’ Comp Rep 152 (1998) the Reviewing Board concluded that off-season time could not be considered as “time lost” from employment, leading to a rather harsh result for Ms. Bunnell and all seasonal workers (landscapers, oil delivery-persons, etc.)
In the Bunnell Case she worked 35 weeks at $750.00 per week. The Judge (affirmed by the Reviewing Board) divided her gross earnings by 52 not 35 weeks yielding an average weekly wage of $508.92. (See also Szwaja v. Deloid Associates, 2 Mass Workers’ Comp Rep 40 (1988).
Section 1 goes on to state:“Where, by reason of the shortness of the time during which the employee has been in the employment of his employer or the nature or terms of the employment, it is impracticable to compute the average weekly wages, as above defined, regard may be had to the average weekly amount which, during the twelve months previous to the injury, was being earned by a person in the same grade employed at the same work by the same employer, or, if there is no person so employed, by a person in the same grade employed in the same class of employment and in the same district.”Jack Hammer was hired by ABC, Inc. on August 4, 1999 and was injured on October 20, 1999 during which time he earned $5,720.00 or an average of $511.00 per week. Since his hourly rate was $15.00 per hour plus overtime and some rainy days during his 11 weeks of work caused him to lose days and overtime, another $15.00/hour employee who had worked for ABC, Inc. in the same position could be looked at. Jimmy Barr also a $15.00/hour worker earned $33,280.00 including overtime between October 20, 1998 and October 20, 1999 averaging $640.00 per week. Jimmy’s average weekly wage could be used to determine Jack’s compensation rate.
When requesting a comparable employee’s wage records or when an insurer on its own initiative supplies one, consider requesting the wage records of more than one such employee if the wages provided seem low or below what your client was earning during his or her short tenure. An employer will often submit the lowest wage of a comparable employee.
Section 1 of General Law, Chapter 152 goes on to define concurrent employment as follows:“In case the injured employee is employed in the concurrent service of more than the one insured employer or self-insurer, his total earnings from the several insured employers and self-insurers shall be considered in determining his average weekly wages.” The injured worker does not have to have worked for both employers on the date of injury only that he was so employed on the date of injury.
Chartier’s Case, 19 Mass App Ct 7 (1984);
Vernon vs. Park Marion Nursing Center, 4 Mass. Workers’ Comp Rep. 97 (1990);
Pleska vs. Worcester Taper Pin, 4 Mass. Workers’ Comp Rep. 408 (1990)
Hamilton vs. Ermon Corp, 6 Mass. Workers’ Comp Rep. 189 (1992)
Example:Jack Hammer worked for ABC, Inc. Monday through Friday and averaged $640.00 per week. On Saturdays, he worked for White Hen Pantry and earned $100.00 for the day. One Saturday he received a disabling injury at White Hen. His concurrent earnings would be $740.00 and White Hen’s insurer would pay a compensation rate of $444.00 ($740.00 x 60%).
N.B. Section 1 requires that the concurrent employer be an insured employer or self-insurer. Therefore, concurrent self-employment, federal employment, uninsured employment or out of state employment could not be used as a source of wage increase. See Hinder v. Lance, Inc., 13 Mass Workers’ Comp Rep 376 (1999) where out of state employment was not considered. (citing Letteney’s Case, 429 Mass 280 (1999)).
General Law, Chapter 152, Section 1 was amended with a procedural, hence retroactive, change effective 12/23/91 and it reads:“Except as provided by sections twenty-six and twenty-seven of chapter one hundred forty-nine, such fringe benefits as health insurance plans, pensions, day care, or education and training programs provided by employers shall not be included in employee earnings for the purpose of calculating average weekly wages under this section.”
Chapter 149, Sections 26 and 27 are the “prevailing wage” law. This amendment clarifies and codifies the holding in Borofsky’s Case, 582 NE 2nd 538, 411 Mass 379 (1991).
Richard Borofsky’s Case, 4 Mass. Workers’ Comp. Rep. 135 (1990);
Machadoi and Leary’s Case, 3 Mass. Workers’ Comp. Rep. 38 (1990);
Sarkis Adghi-Akopyan’s Case, 582 NE 2nd 537, 411 Mass. 1003 (1991);
However, there are certain items that can be included in the definition of average weekly wage i.e. tips (must be reported); commissions, room and board and partial disability payments (see Alicia Louis’ Case, 424 Mass at 140, 676 NE 2d 791).
See also Case of Bradley, 708 NE 2d 963 (1999) for a discussion of this issue.
§51 FOR YOUNG OR INEXPERIENCED WORKERS
General Law, Chapter 152, Section 51 states:“Whenever an employee is injured under circumstances entitling him to compensation, if it is established that the injured employee was of such age and experience when injured that, under natural conditions, in the open labor market, his wage would be expected to increase, that fact may be considered in determining his weekly wage. A determination of an employee’s benefits under this section shall not be limited to the circumstances of the employee’s particular employer or industry at the time of injury.”
(procedural, effective 12/23/91.)
This amendment added the final sentence which removed the restrictive application of Section 51 only to the particular employer or injury at the time of injury.
“Old” Section 51 cases where the employee was restricted to future work for the same employer or in the same industry as when injured:
Gagnon’s Case, 228 Mass 334 (1917)
Bursey’s Case, 325 Mass 702 (1950)
James Sliski vs. Doane & Williams and Hamilton Studios, 7 Mass. Workers’ Comp. Rep. 249 (1993)
Example:Ginger Vitis suffers a herniated disc working as a receptionist for a dental office. Her average weekly wage is $300.00 and her compensation rate is $180.00 ($300.00 x 60%). At the time of her injury, she was enrolled at a local community college pursuing a dental assistant’s diploma with plans to go on and obtain an undergraduate degree. A claim could be brought after an appropriate period of time to ask an Administrative Judge to base her compensation rate on the wages of a dental assistant if she could prove that but for the injury her wages would have been expected to increase.ORJack Hammer, Jr., an engineering graduate student is injured during his summer vacation while working as a security guard with an average weekly wage of $250.00 per week. A Section 51 claim could be brought asking an Administrative Judge to determine, but for his injury, what his wages might have risen to in the open labor market based on his education to date at the time of injury and/or later when he would have completed his education or pursued his career. The Reviewing Board in the Sliski Case (supra) supported “periodic re-examinations of an injured employee’s wage projections over an entire working life.” The Reviewing Board also held that either side could request revisitation of wage projections where circumstances dictate. Testimony from a vocational expert would be most useful in this type of claim.
The Reviewing Board recently decided an interesting case involving §51. Etienne v. GMC Masonry Co., 14 Mass Workers’ Comp Rep 51 (2000). In Etienne, the employee through his collective bargaining agreement had periodic wage increases projected after his date of injury and sought to raise his average weekly wage utilizing Section 51.
In rejecting this attempt, the Reviewing Board interpreted §51 as requiring the future wage increases be based on an employee’s progression in his field through experience, training and skill acquisition rather than through “purely inflationary” union contract increases. There may be, however, other fact patterns that merge the two factors i.e. young union worker seeking to gain an increased base on his contract but dependent also on skill acquisition, hence not “purely inflationary.”
INCREASE IN COMPENSATION RATE UNDER §35B
General Law, Chapter 152, Section 35B states:“An employee who has been receiving compensation under this chapter and who has returned to work for a period of not less than two months shall, if he is subsequently injured and receives compensation, be paid such compensation at the rate in effect at the time of the subsequent injury whether or not such subsequent injury is determined to be a recurrence of the former injury; provided that if compensation for the old injury was paid in a lump sum, he shall not receive compensation unless the subsequent claim is determined to be a new injury.”
(Added by St. 1970, c.667, §1)
Section 35B (as does Sections 35C,51A,COLA, discussed below) pieces of evidence of the same legislative purpose; to protect employee’s compensation from the ravages of inflation and to avoid obsolescence of compensation rates.
Section 35B requires that
- an employee receives compensation (i.e. defined as compensable lost time under Section 34 or 35, see Richard Russo vs. General Electric, 8 Mass. Workers’ Comp Rep. 52 (1994);
- return to work for at least two months;
- is subsequently incapacitated (not a new injury).
Then he/she shall receive “compensation at the rate in effect at the time of the subsequent injury (disability).”
Needless to say, the workers’ compensation “reforms” of 1991 changed the legal landscape under §35B in that with rate and duration reductions, the application §35B could serve to lower, rather than increase compensation benefits. The typical scenario involved an original injury pre 1991, a return to work then a recurrence of disability after 1991 when rates and durations were lower. There were many Review Board cases interpreting the interplay of §35B in view of the decreased entitlements after 1991. For the most part, their decisions indicated some degree of discretion under §35B allowing injured workers to decide whether to claim §35B based on its positive or negative impact on their claim.
The Case of Taylor 691 NE 2d 997 (Mass App Ct 1998) changed the legal maneuvering. According to Taylor Section 35B must be applied even if it negatively affects a claimant’s benefits. At p 1001, “The Legislature is further presumed to know the effect of §35B would have upon the other sections…” Therefore, “… it is improbable that the Legislature did not anticipate that §35B would result in a decrease of benefits to an employee if the prevailing rates at the time of a “subsequent injury were lowered”.
LATENCY CLAIMS UNDER SECTION 35C
General Law, Chapter 152, Section 35C states:“When there is a difference of five years or more between the date of injury and the initial date on which the injured worker or his survivor first became eligible for benefits under section thirty-one, thirty-four, thirty-four A, or section 35, the applicable benefits shall be those in effect on the first date of eligibility for benefits. For purposes of adjustments to compensation under sections thirty-four B and thirty-five F for employees subject to this section, the first date of eligibility for benefits rather than the date of injury shall be used for purposes of computing such supplemental benefits.”
(Added by St. 1985, c.572, §45.)
Section 35C was inserted in the Workers’ Compensation Act under the 1985 Reform Act and was not altered in the 1991 amendments. It is related in philosophy to Section 35B but is mutually exclusive, as Section 35C requires that no compensation be paid prior to onset of disability and Section 35B requires that there be a return to work after the payment of compensation.
Its purpose was to adequately compensate claimants from obsolescent compensation rates resulting from diseases with long latency periods such as asbestosis, berylliosis, certain industrial cancers, etc. Section 35C may also be applicable in other cases such as shoulder injury as had occurred to Thaddeus Kszepka in 1972 but which did not disable him until 1982.
See Kszepka’s Case, 3 Mass Worker’s Comp Rep 148 (1989).
Example:Morris Phillips, an employee of Sylvania in 1941 with an average weekly wage of $20.00, was exposed to beryllium powder, and over many years suffered from complications of beryllium disease causing him to become disabled in 1984. At that time, he was a retired attorney for the federal government and his average weekly wage at retirement was $1,100.00. As he had received no benefits under Sections 31, 34, 34A or 35 prior to 1984, he was entitled to $320.29 per week (1984 maximum weekly rate). See Morris Phillips v. Sylvania, 8 Mass Worker’s Comp Rep 260 (1994); affirmed by the Appeals Court Phillips Case, 672 NE 2d 122 (1996)
However, assume Morris Phillips received a short period of Section 34 benefits in 1941 as a result of his exposure to beryllium. Even with a 43-year latency resulting in a 1984 onset of disability, Section 35C would provide no relief for Morris. In such a case, Section 35B, discussed above, would provide similar relief, i.e.
- payment of compensation (in 1941)
- return to work of over 2 months (until 1984)
- subsequent incapacity
- entitlement to rate and wage in effect in 1984 (Section 35B and Puleri’s Case supra).
An insurer may argue that Section 35B would not apply as it was enacted in 1971 to be applied to injuries on or after February 1, 1971. See the decision in Don Francisco’s Case, 14 Mass App Ct 456 (1982) where the Appeals Court held that the subsequent disability after 1971 made Section 35B applicable even if the original injury occurred before February 1, 1971.
Note that the added benefits paid by the insurer pursuant to Section 35C are reimbursable by the Department of Industrial Accident’s Trust Fund. See General Law, Chapter 152, Section 65(b).
In any claim in which Section 35C might be claimed or raised, the employee or insurer should seek to join the Trust Fund to the claim as the Trust Fund may be available to participate in any settlement negotiations. See Appendix A for a sample of motion.
INCREASED RATE UNDER SECTION 51A
General Law, Chapter 152, Section 51A states:“In any claim in which no compensation has been paid prior to the final decision on such claim, said final decision shall take into consideration the compensation provided by statute on the date of the decision, rather than the date of the injury.”
(Added by St. 1969, c.833, §1.)
[NOTE: St. 1969, c.833, §2 made this section applicable only to injuries occurring on or after the effective date of November 25, 1969.]
The legislative purpose of this section was to increase benefits to employees who were forced to go without compensation during the lengthy period of litigation within the Industrial Accident Board or the courts. The statue was also intended to deter insurers from withholding payment of benefits in cases where compensation ought to have been paid or by forcing an employee to await a “final decision” before payment be made.
One of the most significant cases interpreting Section 51A is McLeod’s Case, 14 Mass App Ct 906 (1982), affirmed 389 Mass 431 (1983). In McLeod’s Case, it was held that, where the employee had not been paid compensation prior to a final decision, benefits were to be paid at the rate in effect on the date of the Board’s final decision or as of the date of the appellate process, if any has been concluded. The case is also important in that ad Administrative Judge of the Department of Industrial Accidents was without discretion as to apply rates in force on the date of injury as long as circumstances requiring the application of Section 51A were met. Section 51A is therefore self-operative. Arruda v. George E. Keith Co., 5 Mass Worker’s Comp Rep 14 (1991).
Accordingly, while it is good practice for employee’s counsel to claim Section 51A, the mere failure to claim 51A would not deprive an Administrative Judge or the Reviewing Board from awarding Section 51A.
Other areas of controversy concerning Section 51A have to do with whether or not it applies to separate claims arising from the same injury.
What about the situation where an injured worker receives benefits under Section 34 for temporary total incapacity, however, the insurer denies a claim under Section 34A for permanent and total incapacity and the employee wishes to apply Section 51A to the Section 34 award.
Can the insurer argue that, since compensation “has been paid prior to the final decision on such claim”, Section 51A would not apply?
See the decision in Hanson’s Case, 26 Mass App Ct 988 (1988) which held that Section 51A was correctly applied to a claim under Section 34A despite the fact that the employee had been paid benefits under Section 34. The Reviewing Board has followed this rationale in Mugford vs. Fluor Construction, 7 Mass Worker’s Comp Rep 190 (1993) and Spinosa vs. Turner Bros Construction Co., 9 Mass Worker’s Comp Rep 524 (1995).
In Hanson’s Case, the court held that Section 51A has an independent application to separate and distinct claims for benefits arising from the same injury. Accordingly, even though Hanson received temporary total disability benefits, the fact that permanent total disability benefits under Section 34A were not paid, it was that “claim” for which benefits had not been paid that triggered the application of Section 51A.
Other cases dealing with Section 51A cover what is meant by “final decision”. See Biagini’s Case, 26 Mass App Ct 952 (1988) where the Appeals Court held that the “final decision”, for purposes of Section 51A, is the Reviewing Board decision and that, despite the fact the insurer made payments during the judicial appeals process, Section 51A was nevertheless applicable.
See also Gordon’s Case, 26 Mass App Ct 924 (1988) where the Appeals Court held that, when an insurer withdraws its appeal from a Hearing decision, said decision becomes “final”. See also Matthew’s Case, 27 Mass App Ct 12 (1989) where the Appeals Court found that a Conference Order did not become a final decision until the insurer withdrew its appeal for a Hearing.
In this case, the insurer paid benefits after the Conference Order was issued, and later withdrew its appeal for Hearing. According to the court in Matthew’s, Section 51A had no application as the insurer paid benefits prior to the withdrawal of its appeal.
General Law, Chapter 152, Section 35A states:
“Where the injured employee has persons conclusively presumed to be dependent upon him or in fact so dependent, the sum of six dollars shall be added to the weekly compensation payable under sections thirty-four, thirty-four A and thirty-five, for each person wholly dependent on the employee, but in no case shall the aggregate of such amounts exceed the average weekly wages o the employee. No weekly payment to the employee under this section shall allow the employee to receive an amount in excess of one hundred and fifty dollars per week when combined with the compensation due under sections thirty-four, thirty-four A and thirty-five for the purposes of this section the following persons shall be conclusively presumed to be wholly dependent for support upon an employee.
- A wife upon a husband with whom she lives at the time of his injury.
A husband upon a wife with whom he is living at the time of her injury.
- Children under the age of eighteen years or over said age, but physically or mentally incapacitated from earning, if living with the employee at the time of his injury, or, if the employee is bound or ordered by law, decree or order of court, or by another lawful requirement, to support such children, although living apart from them, or over said age and full time student qualified for exemption as a dependent under section one hundred fifty-one (e) of the Internal Revenue Code.* Children within the meaning of this paragraph shall also include any children of the injured employee conceived but not born at the time of the employee’s injury, and the compensation herein provided for shall be payable on account of any such children from the date of their birth.
- A parent upon an unmarried child under the age of eighteen. In all other cases, questions of dependency shall be determined in accordance with the fact as the fact may be at the time of the injury. An administrative judge or the Reviewing Board may in his or its discretion order the insurer or self-insurer to make payment of the six dollars aforesaid directly to the dependent.”
Amended by St. 1986, c.662, §31; St. 1987, .465, §42.
$6.00 per dependent is paid only if the weekly rate under Section 34, 34A or 35 is less than $150.00 and then benefits for dependents must cease when the aggregate reaches $150.00.
Many times dependency benefits are overlooked when partial disability is awarded and the rate is under $150.00. per week.
Also, many practitioners overlook the fact that parents of a minor are considered dependents (Section 35A (d)). They may also collect survivor benefits in the event the child dies in a work accident.
COLA BENEFITS UNDER §34B
Cost of Living Adjustment applies to persons receiving benefits under Section 34A for permanent total incapacity or surviving spouse death benefits under Section 31.
COLA benefits for persons receiving partial disability compensation under Section 35 were eliminated by the 1991 reform legislation. For injuries between October 1, 1986 and the repeal of Section 35F on December 23, 1991, a COLA was payable provided the employee was receiving Section 35 benefits and at least 36 months had elapsed between the date of injury and the review date, October 1st of each successive year.
Under Section 34B a claimant can receive a COLA if he/she is receiving benefits under Section 34A or Section 31 and where the injury occurred at least 24 months prior to the review date (each October 1).
COLA is not payable if said payment would reduce federal Social Security Disability benefits.