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Appellate Panel Affirms AWW Calculation

J. Steven Rodenberg

We told you back in July 2015 that Matt Riddle tried a case in which one of the main issues was how to properly calculate the average weekly wage (AWW) and compensation rate for a school teacher who actually works for only 38 weeks out of a year. Matt argued that the employer correctly calculated the AWW on the Form 20 by dividing the claimant’s total wages for the year by 52 weeks. The claimant’s attorney argued that the AWW should be calculated by dividing the teacher’s total annual wages by the 38 weeks she actually worked. The hearing Commissioner agreed with Matt’s argument. We fully expected the claimant’s attorney to appeal that finding, and he did so. We are pleased to report that the SCWCC Appellate Panel has now unanimously affirmed the Single Commissioner’s findings in regard to the calculation of the school teacher’s AWW.

On appeal, the claimant’s attorney alleged error based on a number of different grounds including S.C. Code Ann. § 59-21-20 (appropriation for teacher salaries based on 190 days) and the clear and unambiguous language of § 42-1-40, which indicates that the Commission should only depart from traditional AWW calculations in “exceptional circumstances.”

The claimant admitted that while working for the employer, she was a salaried employee and was paid gross earnings of $40,403.01 for the calendar year 2010. She admitted that she received a paycheck every two weeks, including during the summer when she was not actually working.

The Appellate Panel began by discussing the “fairness” analysis required by § 42-1-40, which requires traditional calculation methods “as long as results fair and just to both parties will be obtained.” The Panel pointed out that § 42-1-40 requires that “when for exceptional reasons the foregoing would be unfair, either to the employer or employee, such other method of computing AWW may be resorted to as will most nearly approximate the amount which the injured employee would be earning were it not for the injury.” In this particular case, the Appellate Panel found exceptional circumstances require that the claimant’s AWW be calculated by dividing her total earnings during the 2010 calendar year by 52 weeks. The claimant was a salaried employee paid $40,403.01 over 52 weeks during 2010. Using a 38 week divisor would result in the same AWW as an employee with an annual salary of $55,228.48, over $15,000.00 more than what the claimant admitted she actually earns in a calendar year as a teacher. Such a result would be grossly unfair to the employer and would not be an accurate approximation of the claimant’s future earnings. On the other hand, dividing the claimant’s total earnings by 52 weeks is fair and provides an accurate reflection of the claimant’s probable future earning loss which is the “ultimate objective” of the Act’s AWW statute.

The Appellate Panel went on to note that South Carolina law does not mandate a 38 week divisor under the facts of this case and that § 59-21-20, which governs mandatory minimum appropriations by the state legislature, likewise does not mandate a 38 week divisor under the facts of this case since that statute is not applicable to a determination of AWW in the context of a workers’ compensation claim. The Panel further noted that § 9-1-840 also does not support an award that runs counter to the Act’s fairness requirement.

As we advised in July, neither the Supreme Court of South Carolina nor the Court of Appeals of South Carolina has yet addressed this specific issue in published opinions. It is certainly possible that the claimant’s attorney will appeal the Appellate Panel’s Decision & Order to the Court of Appeals. We will let you know if the claimant’s attorney files a Notice of Intent to Appeal, but, in the meantime, this Appellate Panel Decision gives employers and carriers even further leverage in settlement discussions and hearings regarding this particular issue. Of course, the school teacher scenario extends to persons who have one or more short term jobs over the course of a year. The bottom line consideration continues to be whether the claimant would be receiving more money through receipt of workers’ compensation benefits than he would receive if he were actually working his regular job.

As always, please feel free to contact any of the attorneys at Clement Rivers, LLP with questions regarding this decision or any other South Carolina Workers’ Compensation Commission issues.