SUZANNE GIBBONS, Employee/Appellant, v. DOHERTY EMPLOYMENT GROUP and SAFECO INS. CO., Employer-Insurer, and BLUE CROSS/BLUE SHIELD OF MINN., Intervenor.

 

WORKERS= COMPENSATION COURT OF APPEALS

AUGUST 2, 2002

                                                                             

HEADNOTES

 

WAGES - IRREGULAR; WAGES - CALCULATION.  Substantial evidence supports the compensation judge=s determination that the employee=s earnings were irregular and, given the evidence available in this case, properly adopted a 26-week averaging method to calculate the employee=s weekly wage.

 

Affirmed as modified.

 

Determined by Johnson, C.J., Stofferahn, J., and Pederson, J.

Compensation Judge:  James R. Otto.

 

OPINION

 

THOMAS L. JOHNSON, Judge

 

The employee appeals the compensation judge=s finding regarding her weekly wage on April 30, 2001.  We affirm, but modify the calculation of the weekly wage.

 

BACKGROUND

 

Suzanne Gibbons, the employee, sustained an injury to her neck on April 30, 2001, while working for Doherty Employment Group, the employer.  The employer and its insurer admitted liability for the employee=s personal injury. 

 

The employee was hired by the employer on May 28, 2000, as a machinist.  Initially, the employee earned $10.75 an hour but then received several raises.  On the date of her injury, the employee earned $15.00 per hour and was paid on a bi-weekly schedule.  The employee=s payroll records, Petitioner Exhibit N, document the employee=s bi-weekly earnings commencing with a check dated June 16, 2000 through April 20, 2001, a period of 23 payroll periods or 46 weeks.  The wage records, however, do not show the number of days worked nor do they permit a calculation of the employee=s daily wage under Minn. Stat. ' 176.011, subd. 3.  The employee testified she was hired as a full-time employee to work forty hours per week.  She further testified that, prior to her injury, if she missed time from work it was for doctors= appointments for her children, for which she received vacation pay if that benefit had not been exhausted.  The employee received overtime pay in 13 of the 23 payroll periods prior to her injury.  The employer and insurer agreed the employee received frequent overtime which was includable in the weekly wage computation.  During the 26-week period prior to her injury, the employee=s total earnings varied each pay period from a high of $1,540.88 to a low of $855.30.

 

In October 2001, the employee filed a claim petition seeking various benefits and alleging a weekly wage on the date of injury of $600.00, plus overtime.  The case was heard by a compensation judge at the Office of Administrative Hearings.  In a Findings and Order served and filed February 28, 2002, the compensation judge found the employee=s overtime earnings from April 30, 2000 to October 30, 2000 were not to be considered in determining the employee=s weekly wage, which the judge found to be $545.58, employing an averaging method.  The employee appeals the compensation judge=s method of computing the weekly wage.

 

DECISION

 

1.  Weekly Wage

 

The employee first argues the compensation judge erred in utilizing a 26-week averaging formula to compute the employee=s weekly wage.  The employee contends her wage was not irregular or difficult to determine but was based on a regular 40-hour week.  Accordingly, the employee contends her weekly wage was not less than $600.00 (40 hours times $15.00 per hour).

 

Minn. Stat. ' 176.011, subd. 3, provides that if the amount of the daily wage received by the employee was Airregular or difficult to determine, or if the employment was part time, the daily wage shall be computed by dividing the total amount of wages, vacation pay, and holiday pay the employee actually earned in such employment in the last 26 weeks, by the total number of days in which such wages, vacation pay, and holiday pay was earned . . . .@  Variations from the regular hours of employment because of sick leave, legal holidays or vacation are not a basis for determining the employee=s wages were Airregular.@  Valentine v. Anderson Trucking Serv., 276 N.W.2d 649, 31 W.C.D. 379 (Minn. 1979).  Where the evidence necessary to comply with the statutory directive to compute a daily wage is not available, the compensation judge may use another method so long as that method reasonably reflects the employee=s injury-related loss of earning power.  Straley v. World Book Educ. Prods., 50 W.C.D. 370 (W.C.C.A. 1994); Lardy v. Haberer Seed Farm, 56 W.C.D. 567 (W.C.C.A. 1997), summarily aff=d (Minn. June 30, 1997).

 

The payroll records, Petitioner Exhibit N, are inadequate to permit a statutory computation of the employee=s daily wage. The compensation judge instead computed the employee=s weekly wage by dividing her total earnings during the 13 bi-weekly payroll periods prior to her injury by 26.^[1]  The issue on appeal is whether the compensation judge=s computation method reasonably reflects the employee=s injury-related loss of earning capacity.  We conclude it does.

 

In only two of the 23 payroll periods prior to her injury did the employee actually work 80 regular hours.  During several of these 23 payroll periods, however, the employee did receive overtime and pay described in the records as Aother,@ which could constitute vacation, holiday or sick pay.  In 11 of the 23 payroll periods, the employee was paid a combination of regular, overtime or other hours which exceeded 80 hours per payroll period.  During the 26 weeks prior to her injury, the employee was paid for 80 or more regular, overtime or other hours in only three payroll periods.  The employee=s total wages were different in 11 of the 13 payroll periods prior to her injury and ranged from a high of $1,540.88 for 95.15 hours to a low of $855.30 for 57.02 hours.  In this case, the compensation judge could reasonably conclude the employee=s earnings were irregular and adopt an averaging method to determine the employee=s weekly wage.  The averaging method used by the compensation judge reasonably reflects the employee=s lost earning capacity and it is, therefore, affirmed. 

 

2.  Modification of Weekly Wage Calculation

 

The employer and insurer prepared an illustrative exhibit computing a weekly wage of $545.58 (Resp. Ex. 3).  The compensation judge, apparently in reliance on this exhibit, found the employee=s wage on April 30, 2001 was $545.58 per week.  Although the respondents conceded the employee=s overtime earnings during the two six-week periods prior to her injury were includable in the wage calculation, Respondent=s Exhibit 3 omitted such earnings during three of the bi-weekly payroll periods.^[2]  The employee=s gross earnings during the 26 weeks prior to her injury were $14,567.11, which, when divided by 26, yields a weekly wage of $560.20.  The compensation judge=s weekly wage calculation is modified accordingly.

 

3.  Overtime Earnings

 

The employee next argues the compensation judge=s wage calculation method, as modified, was incorrect.  Averaging the employee=s total overtime earnings over 46 weeks of employment yields an average weekly overtime amount of $20.97.  This amount, the employee contends, should be added to her regular earnings of $600.00 a week, for a total weekly wage of $620.97.  We disagree.

 

Under Minn. Stat. ' 176.011, subd. 18, overtime may be considered in computing the weekly wage if the Aovertime is regular or frequent throughout the year.@  For purposes of computing the weekly wage, however, subdivisions 3 and 18 of the statute limit consideration to the actual wages received during the 26-week period prior to the injury.  See also Rath v. Perlman Rocque Co., 384 N.W.2d 464, 38 W.C.D. 535 (Minn. 1986).  Although the compensation judge could not strictly follow the statutory formula for computation of a daily and weekly wage, we find no reason in this case to base the weekly wage calculation on anything but the pre-injury 26-week wage history. As modified, the weekly wage calculation includes the overtime earned by the employee in the 26-week period prior to her injury. Accordingly, the compensation judge=s computation of the employee=s weekly wage is affirmed.