Traditionally, when an employee has been employed for a year or more, average weekly wage has been determined by averaging the employee's earnings during the fifty-two weeks preceding injury.
Recently, the Court of Appeals held that computation of a decedent's average weekly wage using the fifty-two week period prior to her death was not fair to the decedent and it agreed that the Commission had good grounds to rely only on her last four months of wages. In the case in question, decedent began working as a real estate agent in April of 1992 and sustained a compensable injury in the course of her employment on April 23, 1994, which later resulted in her death. In 1992, decedent earned $3,603.00, and in 1993, she earned $13,007.50. From January 1, 1994, to the date of her death on April 23, 1994, decedent earned $9,849.22. The Court of Appeals agreed with the Commission that it was acceptable to use only decedent's wages from 1994, as there was evidence that she had made "positive changes" in how she performed her job and this increased her earnings during the last four months she worked. Those earnings, said the Court, "most nearly approximate the amount of wages she would be earning were it not for her injury." Mary Hendricks v. Hill Realty Group, Inc. (citation omitted)
Risk Handling Hint: Obviously, this decision ignores the learning curve that all new employees experience, the natural wage increases that employees receive over time, the actual workers' compensation premiums paid by employers, the fluctuations in the real estate market and general principles of "fairness" to employers. Risk managers are encouraged to keep this decision in mind when evaluating for purposes of mediation or settlement cases in which the injured worker's earnings either fluctuate over time or have increased due to a raise received within the twelve months prior to injury.