The Illinois Appellate Court recently issued a decision reversing a Commission Decision for the Petitioner and clarifying precisely how “weeks and parts thereof” should be calculated for an average weekly wage.
In Employco USA, Inc. v. The Illinois Workers’ Compensation Commission, et al. 2023 IL App (1st) 220906WC-U, the Claimant was injured while eating lunch and leaning against a shipping crate. The crate was driven into by a forklift causing the Claimant to be pushed 2-3 feet and resulting in injuries to his back and ankle. The Claimant had only worked at the Respondent’s place of business for three weeks prior to the accident, logging 32 hours in that time period. Twenty-four hours of that work was accomplished at a rate of $47.35 per hour and eight hours of that work were completed at the double-time rate of $94.70 per hour. According to the Claimant, overtime was not mandatory.
At arbitration, the Arbitrator calculated the Claimant’s average weekly wage by multiplying his regular rate of pay, $47.35, by the 32 hours that he worked in the three weeks prior to the accident, then dividing the product by three weeks, for an Average Weekly Wage (AWW) of just over $500.00. On review, the Commission reached an increased AWW of $1,894.00 by multiplying the Claimant’s regular hourly wage by the number of hours that he was paid at his regular rate of pay. The Commission then found that the Claimant worked 8-hour days, thus the twenty-four hours that he worked at his regular rate of pay corresponded to only three days of work, resulting in a daily rate of pay of $378.80. The Commission then took that daily rate of pay and asserted that the AWW should be for five days of work at that daily rate, or $1,894.00, even though the Petitioner never worked a five-day week.
The Appellate Court reversed this decision, based on the calculation of AWW outlined in Sylvester v. Industrial Comm’n, 197 Ill. 2d 225 (2001). The Court noted that the correct method by which to calculate the average weekly wage of an individual who had not worked for fifty-two weeks in the year prior to his or her date of accident should be to divide the claimant’s earnings by the number of weeks and parts thereof during which the claimant actually earned wages, excluding overtime and bonus hours. Id. at 234-37.
The Court reasoned that the Arbitrator’s method for reaching the AWW of $505.07 was far more reasonable. In the method adopted by the Arbitrator and Appellate Court, the Claimant’s wage record established that he earned $1,515.20 for 32 total hours of work during the three-week period in which he worked and was paid at an hourly rate of $47.35 per hour. The Appellate Court found that the eight hours during which the Petitioner was paid at the double-time rate were a bonus. The Court then divided the claimant’s earnings of $1,515.20 by the three weeks during which he actually earned wages while working for the Respondent, resulting in an average weekly wage of $505.07. The Appellate Court placed specific emphasis upon the three methods of AWW calculation as articulated in Sylvester, supra., noting that the Claimant relied on reasoning made in the context of the second method of AWW calculation as opposed to the third, outlined above.
The Court stated that, “...when, a Claimant’s employment prior to his injury extended over a period of less than 52 weeks, his AWW is calculated by dividing his earnings during his period of employment by the number of weeks and parts during which the employee actually earned wages, as the Arbitrator did. The commission’s calculation of the claimant’s AWW is inconsistent with the plain language of section 10.” (Reported by IFMK Law Attorney Associate, David Cooper)