Wiedner & McAuliffe is proud to announce that our partner Matthew Rokusek won a favorable decision on the issue of average weekly wage (“AWW”) calculation from the Illinois Appellate Court in Employco USA, Inc. v. Ill. Workers’ Comp. Comm’n, 2023 IL App (1st) 220906WC-U.
At trial, the employer entered a wage statement into evidence indicating the petitioner worked a total of 32 hours for the three weeks prior to the accident. Petitioner testified he believed he worked 8 hours per day but did not provide additional evidence. The Arbitrator multiplied the regular pay rate of $47.35 by the 32 hours worked ($1,515.20), and then divided by the 3 weeks he worked prior to the accident for an AWW of $505.07. The Arbitrator found that neither party provided evidence of the number of hours that the petitioner was required to work in a day.
The Commission reversed the Arbitrator’s decision and calculated an AWW of $1,894.00. The Commission multiplied petitioner’s regular hourly rate, $47.35, by the number of hours (24) petitioner was paid at his regular rate in the 3 weeks prior to the accident, for a total of $1,136.40. The Commission found the only testimony in evidence was that of 8-hour workdays. The Commission determined $1,136.40 was the equivalent of 3 workdays at the regular pay rate, divided it by 3, for $378.80 per day, and multiplied by 5 days to come to a much higher AWW of $1,894.00. The Circuit Court affirmed the Commission decision.
On appeal, the Appellate Court ruled the Commission made a mistake of law in selecting the proper method for calculating AWW. The Court outlined the four methods of calculating an AWW, outlined in Section 10 of the Illinois Workers’ Compensation Act:
(1) the employee’s actual earnings in 52 weeks prior to his injury, excluding overtime and bonus, divided by 52;
(2) if the employee lost 5 or more calendar days during the 52-week period prior to the date of injury, then the employee’s earnings are divided by the number of weeks and parts thereof remaining after the time lost has been deducted;
(3) where the employment prior to the injury extended over a period of less than 52 weeks, the employee’s earningsduringthatperiodaredividedbythenumberofweeksandpartsthereofduringwhichthe employeeactuallyearnedwages;and
(4) wages of a “similarly situated employee”
The Court rejected the petitioner’s argument in favor of use of the second method as petitioner did not work a full 52 weeks prior to the date of accident. The Court determined that this method was inconsistent with the plain language of Section 10 of the Act. Therefore, the Appellate Court agreed with the employer’s argument that the method the Commission used to calculate the petitioner’s average weekly wage was erroneous as a matter of law, and agreed the AWW should be $505.07.
Comment: The Appellate Court’ reaffirmed the importance of following the four calculation methods of AWW outlined in the Act and deviation from those methods may be reversed as a mistake of law. The Court highlighted that neither the first nor second methods of calculating AWW apply when a petitioner works for the employer less than 52 weeks prior to the work injury and emphasized the importance of witness testimony to support claims of hours worked and hourly rates even where accurate wage records are introduced at trial. While the decision is unpublished and cannot be used as precedent, the importance of close analysis of wages at the outset of claim investigation and utilization of the correct method to calculate AWW is a significant part of claims management to limit claim cost. If you have any questions on this decision or any AWW questions, please contact any attorney at Wiedner and McAuliffe by email or phone at 312-855-1105.
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