WAGES – CALCULATION. The compensation judge accurately determined the employee’s weekly wage for a seasonal worker under Minn. Stat. § 176.011, subd. 8a.
Compensation Judge: Kirsten M. Marshall
Attorneys: Michael P. Garvey, Patterson & Dahlberg, Rochester, Minnesota, for the Respondent. Kenneth J. Kucinski, Arthur, Chapman, Kettering, Smetak & Pikaka, P.A., Minneapolis, Minnesota, for the Appellants.
Affirmed.
KATHRYN H. CARLSON, Judge
The employer and insurer appeal from the compensation judge’s determination of the employee’s weekly wage. We affirm.
Shaylonda Buckwalter, the employee, began working for Fahrner Asphalt Sealers, the employer, in 2017. She worked on a crack-filling road crew during the asphalt season, March/April through October/November, until 2019. While searching for work during the seasonal layoff in 2019, she secured employment as a truss builder with another employer, and worked there until she was rehired as a laborer by the employer in 2020. Her work duties, which included maintaining asphalt, filling cracks, sealcoating, and chip sealing, were physically demanding, were temperature and rain sensitive, and required her to work from “dark to dark,” up to 75 hours per week. (T. 39.) The typical season was 32 to 34 weeks per year.
The employee was paid hourly. In 2022, her standard rate was $25 per hour, and overtime was paid as time and a half after she worked forty hours in a week. When working on a prevailing wage job, the employee was paid a higher hourly rate of $35.50 based on a government-established wage and was paid overtime after eight hours of work per day. The co-president of the employer for two years testified that of the employer’s work in any year, 10 to 15 percent were prevailing wage jobs, but that number varied year to year. He also testified that prevailing wage jobs were spread out amongst the employees, so that all employees could benefit from the higher pay.
At the time of the employee’s injury on June 21, 2022, she was working on a prevailing wage job. On that job, she generally worked 9 to 18 hours per day. (Ex. C.) In the 26 weeks prior to the date of injury, the employee worked 35.76 days, at least half of which were on a prevailing wage job, and earned $22,567.50. (Id.) The employee was injured when she was run over by an asphalt kettle truck, sustaining significant injuries including eight broken vertebrae, five broken ribs, ruptured bladder, broken femurs, broken pelvis, road rash down her entire back and on her elbow, and a laceration above her left eye. The employer and insurer admitted liability for the injury and the employee was off work until May 2023, when she returned to work for the employer as an administrative assistant earning $25.75 per hour. The position is full-time, year-round, and physically appropriate. The employer and insurer paid the employee’s wage loss benefits based on a weekly wage of $3,155.40 pursuant to Minn. Stat. § 176.011, subd. 8a. At the time of the hearing, she was receiving medical treatment including wound care and physical therapy.
At the request of the employer and insurer, Suanne Grobe Ranheim, a vocational consultant, prepared a preliminary vocational records review summary dated December 18, 2023. In this report, Ms. Ranheim opined that a weekly wage of $3,155.40 is an inaccurate representation of the employee’s earning capacity. She noted that the employee’s past annual earnings with the employer extrapolated over 52 weeks was $71,500, compared to $164,000 annually using the statutory weekly wage, resulting in a grossly inflated earning capacity given the employee’s transferable skills and experience. She compared the employee’s hourly wage of $78.88 under the statutory formula for her position as a laborer to a prevailing wage of $68.38 per hour for a heavy power equipment operator, which requires more skill. Ms. Ranheim stated that the statutory weekly wage of $3,155.40 is not “realistic or attainable relative to [the employee’s] skills and labor market, nonetheless the road construction industry in the Midwest region.” Given these circumstances, she concluded that the employee’s demonstrated past work wages of $1,375 per week, based on the employee’s earnings in 2021, were a more accurate reflection of her earning capacity. (Exs. 2 and 4.)
The employer and insurer filed a petition for discontinuance, seeking to pay future wage loss benefits utilizing a weekly wage of $1,375, asserting that a departure from a strict application of Minn. Stat. § 176.011, subd. 8a, was warranted since the strict application of the statute resulted in a weekly wage that did not fairly approximate the employee’s earning capacity and was unfair to the employer and insurer. At a hearing held on January 19, 2024, the employer and insurer argued Ms. Ranheim’s determination of $1,375 per week was a more accurate reflection of the employee’s earning capacity. The compensation judge issued her Findings and Order on January 26, 2024, denying the petition for discontinuance and finding the employee’s weekly wage to be $3,155.40 per Minn. Stat. § 176.011, subd. 8a. The employer and insurer appeal.
On appeal, the Workers’ Compensation Court of Appeals must determine whether “the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.” Minn. Stat. § 176.421, subd. 1(3). Substantial evidence supports the findings if, in the context of the entire record, “they are supported by evidence that a reasonable mind might accept as adequate.” Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed. Id. at 60, 37 W.C.D. at 240. Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of evidence or not reasonably supported by the evidence as a whole.” Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
A decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which the Workers’ Compensation Court of Appeals may consider de novo. Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff’d (Minn. June 3, 1993).
The employer and insurer appeal from the compensation judge’s finding that the employee’s weekly wage is $3,155.40 under the formula set forth in Minn. Stat. § 176.011, subd. 8a, arguing that application of the statute produces a weekly wage that does not accurately reflect the employee’s earning capacity and creates an unreasonable outcome. We are not persuaded.
An employee’s weekly wage is determined by using the daily wage, as defined in Minn. Stat. § 176.011, subd. 8a. Under that provision, if the daily wage of the employee is irregular or difficult to determine, “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 . . . .” The weekly wage is then calculated by multiplying the employee’s daily wage by the number of days and fractional days normally worked. Minn. Stat. § 176.011, subd. 18. However, “in the case of the construction industry, mining industry, or other industry where the hours of work are affected by seasonal conditions, the weekly wage shall not be less than five times the daily wage.” Minn. Stat. § 176.011, subd. 8a (emphasis added).[1]
In interpreting this statute, we are mindful of the Minnesota Supreme Court’s directive that the “first step is to examine the statutory language to determine whether the statute is ambiguous.” Sershen v. Metro. Council, 974 N.W.2d 1, 8 (Minn. 2022). If the statute is not ambiguous, the statute is construed using the plain and ordinary meaning of the words and phrases. Allan v. R.D. Offutt Co., 869 N.W.2d 31, 75 W.C.D. 401 (Minn. 2015). As the supreme court stated in a case involving a construction worker, “the weekly wage for an employee in the construction industry is, as a matter of law, calculated at not less than five times the daily wage.” Berry v. Walker Roofing Co., 473 N.W.2d 312, 315, 45 W.C.D. 125, 129 (Minn. 1991). The same determination applies to industries where the hours of work are affected by seasonal conditions, such as this case. The plain meaning of the statute is not in dispute and because the employee is a seasonal worker, the statute mandates that the employee’s daily wage be multiplied by five to determine her weekly wage. [2]
The employer and insurer assert that, given the circumstances of this case, the compensation judge erred by failing to exercise her discretion to depart from the statutory wage formula in order to arrive at a fair approximation of the employee’s earning capacity. They further argue that their vocational expert’s wage determination is the appropriate departure.
The purpose of the statutory formula set forth in Minn. Stat. § 176.011, subd. 8a, is to “‘factor out’ the periods of seasonal unemployment or underemployment and to compensate [such employees] as though they were full-time, year-round employees.” Koziolek v. Aconite Corp., 49 W.C.D. 498, 500 (W.C.C.A. 1993), summarily aff’d (Minn. Dec. 15, 1993). Utilization of the statutory formula is appropriate even where the resulting imputed wage is greater than the employee’s actual earnings. Palkowski v. Lakehead Constructors, 57 W.C.D. 21 (W.C.C.A. 1997), summarily aff’d (Minn. July 14, 1997).
Departure from the statutory formula is appropriate in cases where the evidence necessary to comply with the statutory directives concerning the calculation of an employee’s weekly wage is not available. In such a case, the compensation judge may use another method of calculation as long as that method reasonably reflects the employee’s injury-related loss of earning power. Id. at 24; Straley v. World Book Educ. Prods., 50 W.C.D. 370 (W.C.C.A. 1994) (there was no evidence of the number of days the employee worked in the 26 weeks prior to the injury), summarily aff’d (Minn. May 24, 1994); Hansford v. Berger Transfer, 46 W.C.D. 303, 309 (W.C.C.A. 1991), summarily aff’d (Minn. Mar. 19, 1992). Departure has also been allowed where an alternative method better meets the intent of the statute. Koziolek, 49 W.C.D. at 500 (where the statutory calculation did not reflect that the employee regularly worked his 40-hour work week in four days instead of five, the compensation judge could reasonably base the employee’s weekly wage on 40 hours per week rather than the five-day calculation).
In this case, there is undisputed and ample evidence of the employee’s earnings and number of days worked from the beginning of the 2022 season, March 15, 2022, to her date of injury, June 21, 2022. The employee worked 35.76 days,[3] earning $22,567.50. (Exs. B, C, and 3.) Using the statutory formula, the employee’s daily wage is her gross earnings divided by the number of days worked, which yields a daily wage of $631.08. Per Minn. Stat. § 176.011, subd. 8a, the daily wage is to be multiplied by five, which yields a weekly wage of $3,155.40. Since the evidence necessary to comply with the statutory directive is available and undisputed, there is no compelling argument that the evidence used to determine the employee’s weekly wage was not sufficient.[4]
The employer and insurer argue that a departure from the statutory formula is required as this case involves unusual circumstances where prior to the injury, the employee worked a majority of the season on a prevailing wage job which paid a higher rate than her standard rate of pay, resulting in a weekly wage that is not a fair approximation of the employee’s earning capacity. Specifically, they point out that the weekly wage of $3,155.40 under the statutory formula is the equivalent of earning $100,000 per construction season, or over $160,000 annually at an hourly rate of $78.88, assuming a forty-hour work week, which more than triples her standard hourly pay rate. Since it is unusual for an employee to spend a majority of the season working on prevailing wage jobs, they argue, the statutory formula unfairly inflates the employee’s earning capacity. We do not agree.
This court has addressed a similar result in Palkowski v. Lakehead Constructors, a case involving overtime wages, where we explained:
Although the wage calculation required in this case results in an imputed yearly earning potential significantly higher than the employee’s actual annual earnings, it is transparently obvious that application of the statutory formula to a seasonal worker will always produce an imputed wage greater than the employee’s actual earnings. Moreover, although the disparity between the employee’s actual earnings and the value of the imputed weekly wage is magnified by the inclusion of overtime in this case, the result appears to be precisely that contemplated by the statute. The statutory calculation represents the legislative intent to “factor out” the periods of seasonal unemployment or underemployment and to compensate such workers as though they were year-round employees. . . . We agree with the employer and insurer that there is a large, even extreme, disparity between the employee’s average weekly wage as calculated, and his actual annual earnings. However, the calculations made in this case are those specifically mandated by the statute, and the question of whether the result is reasonable and fair is a question not for this court, but one best directed to the legislature.
57 W.C.D. at 27. “The object of wage determination is to ‘arrive at a fair approximation of [the employee’s] probable future earning power which has been impaired or destroyed because of the injury.’” Knotz v. Viking Carpet, 361 N.W.2d 872, 874, 37 W.C.D. 452, 455 (Minn. 1985) (quoting Sawczuk v. Special Sch. Dist. No. 1, 312 N.W.2d 435, 437-38, 34 W.C.D. 282, 287 (Minn. 1981)). With the employee’s restrictions resulting from the work injury, she will not be able to work on prevailing wage jobs with this or any other employer. As pointed out by the compensation judge, prior to the injury, the employee could have taken her skillset to an employer that only worked on prevailing wage jobs. Her earning capacity lost due to the injury, therefore, is accurately reflected by utilizing the formula mandated by the statute.
The employer and insurer also argue that this case is more in line with cases which consider “fairness and accuracy” to depart from the statutory formula, including Koziolek, Bradley v. Vic’s Welding, 405 N.W.2d 243, 39 W.C.D. 921 (Minn. 1987), and Johnson v. D.B. Rosenblatt, Inc., 265 Minn. 427, 122 N.W.2d 31, 22 W.C.D. 468 (1963). However, these cases are distinguishable from this case. In Koziolek, this court agreed with the compensation judge’s departure from the statutory formula when the evidence showed that the employee consistently worked four ten-hour days, and that multiplying the daily wage by five would result in a weekly wage based on a 50-hour work week rather than a 40-hour work week, a result not intended by the statute and which produced a weekly wage that the employee would not earn with that employer. 49 W.C.D. at 501. In contrast, the employee in this case actually did earn as much or more than the imputed weekly wage during several pay periods. In Bradley, the Minnesota Supreme Court reversed this court’s inclusion of overtime hours where an employee worked on a “turn around” job for the employer in his only three weeks of employment before the injury. Since the turnaround job was only meant to last for three weeks, the court concluded that overtime hours were not regular or frequent throughout the year and should not be included in the employee’s weekly wage, and therefore Minn. Stat. § 176.011, subd. 3 (now subd. 8a) was not applied in that case. Likewise, Johnson involved an employee who worked as a pieceworker, not a seasonal employee, and had only worked for the employer for two weeks. Given the circumstances of this case, the employer and insurer’s reliance on these cases and their progeny is misplaced.
Minn. Stat. § 176.011, subd. 8a, provides a mandate for calculating a weekly wage for seasonal and construction workers. The statute was revised in 2000 and renumbered in 2008. Instead of revising the statute to limit the weekly wage of seasonal workers, the legislature added language in 2000 to include partial workdays, a revision which in effect increased the weekly wage of a seasonal employee in those circumstances.[5] As noted in Palkowski, whether the result is fair and reasonable is a question for the legislature, not for this court. We affirm the compensation judge’s application of the statutory method of calculation and the finding of the employee’s weekly wage.
[1] The underlined language was added to Minn. Stat. § 176.011, subd. 3, in 1967. In 2000, subdivision 3 was amended to include the proportional day language: “If the employee worked or earned less than a full day’s worth of wages, vacation pay, or holiday pay, the total amount earned shall be divided by the corresponding portion of that day.” In 2008, this subdivision was renumbered to subdivision 8a.
[2] The employer and insurer also appealed the compensation judge’s findings that the employee’s work hours depended on the weather as a seasonal worker. (Findings 5 and 12.) However, the issue of whether the employee was a seasonal worker was not briefed and is therefore deemed waived.
[3] The employee worked on more than 35.76 days, but on several of those days the employee worked only a portion of the day, thus the 35.76 reflects the total number of whole and partial days worked. (Ex. C.)
[4] Although Finding 13 regarding the employee’s earnings and number of days worked was appealed, the employer and insurer did not offer any opposing evidence regarding that finding and agreed at oral argument that there was no dispute with the stated earnings, the number of days worked, or the compensation judge’s calculations.
[5] The effect of this change in the law is illustrated by comparing the result reached in applying the previous statute in Blight v. Harbor City Masonry, 60 W.C.D. 131 (W.C.C.A. 2000), summarily aff’d (Minn. May 22, 2000), with how the result would differ under the current statute. In that case, this court addressed the calculation of a construction worker’s weekly wage where the employee had worked three full days and one partial day before sustaining a work injury. Under the statutory formula for injuries sustained in 1996, the employee’s wages were divided by four to produce a daily wage and then multiplied by five for the weekly wage per Minn. Stat. § 176.011, subd. 3 (now 8a). The employee argued that this method did not reflect his actual earning capacity, as the short period of time worked on the day of the injury exaggerated the time missed due to weather. With the revision to the statute in 2000, the employee’s gross earnings would have been divided by 3.5, thus yielding a higher daily and weekly wage.