WC Risk Alert: Wage Calculation for Temporary Employee
Keith Tedder was hired as a temporary delivery driver for A&K Enterprises to fill in for a permanent employee who was scheduled to be out of work for seven weeks. Tedder was paid $625 per week. Tedder had an unrelated back injury from 2004 and was assigned permanent, medium-duty restrictions in 2006 as a result. Just one week after Tedder began driving for A&K, he injured his back picking up a package. He worked the rest of the day but A & K had to find another driver to cover the remaining six weeks of temporary employment. Tedder never returned to work for A & K or any other employer. He filed a claim for workers’ compensation benefits which was denied by A & K. After a hearing, the Deputy Commissioner concluded that Tedder had sustained a compensable injury to his back and awarding him temporary total disability payments based on an average weekly wage of $625 per week. The Full Commission affirmed. A & K appealed.
On December 16, 2014, in Tedder v. A & K Enterprises, the Court of Appeals reversed in part and remanded the Full Commission’s decision regarding the calculation of the average weekly wage.
As for the calculation of Tedder’s average weekly wage, the Court noted that N.C. Gen. Stat. § 97-2(5) lists, in order of preference, the five methods for calculating an average weekly wage. Tedder was a temporary employee hired to work seven weeks only and as such, the fifth was the most appropriate method to use in his case. While the Commission properly used Method 5, the Court found that the Commission erred in its calculation under method 5 because Tedder’s employment was temporary and scheduled for only seven weeks at the longest. The Commission’s calculation of $625.00 effectively treated Tedder as if he had been a full time, permanent employee. The Court rejected that calculation because it conflicted with the directive of the statute in Method 5 – to use a methodology that will most “nearly approximate the amount which the injured employee would be earning were it not for the injury.” Using an average weekly of wage of $625.00 ignored the premise of the wage being an ‘average’ of the employee’s earnings and was a rate that was “unfair” to defendants. Looking to Joyner, Conyers and Thompson, the Court offered that an appropriate calculation would be divide Tedder’s total earnings in his temporary position with A&K by 52 even though it recognized that amount would be barely above the statutory minimum.
Risk Handling Hint: Risk managers should consider carefully the nature and length of an employee’s work assignment before calculating the average weekly wage. Tedder serves as a reminder that fairness should be a major consideration in determining average weekly wage and that the Court’s intention is to compensate the injured worker to the extent that he would have been paid, but for his injury.