In my last blog post, I discussed recent developments in the workers’ compensation law in the District of Columbia with regard to injured workers being paid based upon wages lost at one or more jobs as a result of a work injury. This is referred to as “wage stacking.” Let’s now delve a little more deeply into how lost wages are calculated and how injured workers are paid when they are recovering from and living with their injuries.
A Brief Review on Wage Stacking
To briefly refresh, I believe that one of the most important benefits, aside from medical care and treatment designed to get you better and back to work, are the wage replacement benefits you are entitled to receive while you recover from your injuries and are unable to work. These are known as temporary total disability benefits.
In the District of Columbia, where I focus the majority of my practice, injured workers are entitled to “stack” their wages for purposes of the calculation of workers’ compensation benefits. This means that injured workers who are working at two or more jobs at the time of their injury are entitled to be paid based upon lost wages from both jobs. The law makes no distinction in terms of how much injured workers are entitled to be paid depending on which of their two jobs they were performing when injured. In other words, even if someone is injured while working at a job that pays $100.00 per week, and the injury prevents them from also working at their job that pays you $1,000.00 per week, they can still “stack” their wages.
Unfortunately, this is a key area of the law where Maryland and Virginia are lacking. In Maryland, injured workers cannot stack their wages at all. So, if someone is injured while working at their part-time job and misses time from a much more lucrative full-time job, the state of Maryland has determined that they are out of luck and just have to deal with the very limited income replacement benefits. Virginia has essentially a “middle ground” law between D.C. and Maryland. In Virginia, injured workers can only stack their wages if their second job is similar to the job at which they are injured.
This, of course, can lead to disastrous outcomes such as being unable to feed their family, being evicted or foreclosed upon, or any other of the other travesties detailed in a 2015 article by National Public Radio.
How are Temporary Total Disability Benefits Calculated?
In all three jurisdictions, temporary total disability benefits are paid at 2/3 of an injured worker’s average weekly wage (the resulting amount of the payment is referred to as a “compensation rate”). Although the average weekly wage has been calculated using gross (pre-tax) wages, and although the compensation rate is not taxed, this still usually leaves injured workers in the hole while they are out of work and recovering from their injuries. I say this because 66 2/3% of your gross wages is generally less than the amount of take-home wages even if a person is taxed by the federal government, state and local governments, and makes some contribution for health insurance. Insurance companies and the drafters of the workers’ compensation laws would have us believe that this should somehow “incentivize” injured workers to want to return to work as quickly as possible, but I have only ever seen it have negative consequences when my clients have attempted to return to work earlier than their doctors would permit only because they need to earn more money to keep up with their financial obligations. In short, I think it is a travesty of justice to only pay injured workers 2/3 of their gross wages. This figure should be closer to, if not in excess of, 73% in our region based upon the average percentage of income paid as federal tax (21%) and the average state and local taxes paid by residents of Virginia and Maryland (5.63% and 6% respectively).
Generally speaking, an injured worker’s average weekly wage is calculated based upon his or her gross earnings within a set timeframe immediately preceding the work injury. A major difference in the three jurisdictions, however, is the number of weeks that are factored into the calculation of an injured worker’s average weekly wage. Virginia allows for the calculation of average weekly wage based upon the earnings in the entire year prior to the work injury; the District of Columbia allows for the calculation to be based upon the half year prior; and Maryland allows for the calculation to be based upon the 14 weeks prior to the work injury.
As always, however, there are numerous exceptions to every rule. For example, many people work in seasonal employment. This can include those who work in retail during the holiday season, those who work in landscaping or other outdoor service jobs, employees at the major sports arenas and stadiums in the area, and even teachers who choose to get paid on a nine month cycle as opposed to a 12 month cycle. In these situations, the injured employees are not prejudiced by the fact that they did not have steady earnings during the entirety of the time period generally used for calculation of their average weekly wage.
Similarly, if an injured worker had recently returned to work from a prior injury or had recently started working at the job, then only the wages as of the date of return to work or the beginning of employment will be considered. It is also long-settled law that weeks in which the injured worker did not work will be excluded from the calculation. See United Parcel Service v. D.C. Department of Employment Services, 834 A.2d 868 (D.C. 2003). The same principle would, of course, apply to any vacations taken during the relevant time period.
What counts as wages?
Perhaps the most interesting aspect of the average weekly wage calculation, at least to me, is what is included in the definition of “wages.” I have seen this arise in my practice in multiple, very interesting instances. For better or for worse, the District of Columbia has determined that, in certain instances, not all employee benefits are considered to be wages. I represented a union member who was paid, under his union’s collective-bargaining agreement, both regular hourly wages as well as employer-paid contributions into his retirement plan and health savings account. All of these things were paid for out of the same chunk of money (and I liken this to a non-union employee paying a portion of their wages into a 401(k)), but the District of Columbia courts determined that only the money paid as actual wages to my client would get included in the calculation. Unfortunately, this area of the law is pretty well settled under both the District of Columbia Workers’ Compensation Act as well as its predecessor (which also happens to be one of the federal workers’ compensation laws), the Longshore and Harbor Workers’ Compensation Act.
Other injured workers who I routinely see fall victim to the District of Columbia law regarding the definition of wages are those who work in employment where they are paid both wages and tips (generally, these people are waiters or waitresses). The D.C. workers’ compensation law only allows for the inclusion of tips only if they have been declared for tax purposes. D.C. Code § 32-1511(b). Unfortunately, as most of you who have worked in the service industry will know, this is rarely done, or people generally under value the amount of compensation they are paid in tips. This can lead to financially ruinous results when one of these employees is injured on the job and only paid based upon his or her less-than-minimum-wage hourly wages and not the tips that form the bulk of that person’s take-home pay.
One other interesting aspect of the law regarding the calculation of average weekly wages comes from the same subsection as the language regarding the inclusion or exclusion of tips. That subsection also allows for the inclusion of the “reasonable value for board and lodging received from the employer.” D.C. Code § 32-1511(b). Maryland is actually a bit broader and allows for the inclusion of “ the reasonable value of housing, lodging, meals, rent, and other similar advantages that the covered employee received from the employer.” Md. Code, Lab. & Empl. Section 9-602(a)(2)(ii). This section of the law generally applies to those people who live at their place of employment. For example, I have seen this play out for domestic workers, such as butlers and chefs, as well as farmhands working on the chicken farms on the Eastern Shore of Maryland. Although it may seem a little bit strange to include these types of things with in the definition of wages, it makes sense when looked at through the lens of the benefit to the employer: in all of these situations, the employer is deriving a benefit from having its employees housed either on its premises or in very close proximity thereto. In return, when an employee in this type of employment is injured, the law recognizes that the employee is then entitled to transference of the benefit that their employer was getting in the form of it being included in their weekly workers’ compensation checks.
The lesson to be learned from all of this is this: Your “wages” when you are injured at work may not always just include what you take home from the specific job in which you were working at the time of the injury. It is important to hire an attorney who is experienced in workers’ compensation and who can properly advise you and advocate on your behalf to ensure that you are not suffering from a substantial loss of income during a very difficult time in your life.