Wage Reconstruction in Workers’ Compensation Cases for Part-Time Employees

Posted in Workers' Compensation

In a previous blog post I discusses wage reconstruction in workers’ compensation cases. I would like to point out that there is a slight difference in the way an injured workers’ wages is constructed when that employee is a part time employee with no full-time work. In this case, a judge of compensation must employ the principles of “fairness and equity” in determining if the circumstances warrant reconstruction of a part-time worker’s wages. However, the Appeal court drew a distinction, as did prior cases, for part-time workers – concluding that reconstruction is appropriate when the “permanently disabling accident ‘prevents or interferes with later full-time employment.’” (Citing Engelbretson v. AM. Stores, 49 N.J. Super. 19 (App. Div. 1957) aff’d, 26 N.J. 106 (1958).

Determining the ‘rate’ at which compensation should be paid is often the central issue in claims involving part-time workers. If a worker makes $100 a week as a part-timer, the permanent disability rate (the rate at which permanent disability benefits is paid) would be $70 per week. For an award of 20% of the leg (at the 2011 rates) a part-time worker earning $100 per week is due an award of $4,140.00. A full-time worker, earning wages greater than $290 per week, would be due a “full” statutory award of $13,293.00.

There are many instances where a judge of compensation is persuaded to “reconstruct” a part-time wage into a full-time wage. This results in a much-higher award (in our example, $4,140 versus $13,293). The Judge of Compensation can be persuaded to “reconstruct” wages to a full-time rate because the law allows for wages of a part-time employee may be reconstructed for purposes of fixing the rate for permanent partial disability in accordance with N.J.S.A. 34:15-37 based upon “diminished future earning capacity.” 

However, there are equally many cases where the Judge will determine wage reconstruction is not appropriate. Here is an example of a case where wage reconstruction was rejected. In Gruzlovic v. Giovani’s Trattoria, A-1519-08T1 (App. Div. Decided April 15, 2010), the appeals court reviewed the decision of a Judge of Compensation who had “reconstructed” part-time wages of a cafeteria worker, resulting in an increased award. The claimant in this case was a 76-year-old woman who worked nine hours per week, earning $10.50 per hour (average weekly wage of $94.50). During the thirteen years the claimant worked for the employer, she did not have or seek additional part-time employment. After the accident at work, the claimant no longer worked, stating simply, “I thought I had my share [of work].” The Judge of Compensation awarded the petitioner 25% permanent partial benefits, and “reconstructed” the rate so that the claimant received the “full” statutory award ($30,420). The Appeals Court overturned this ruling, and ruled that the claimant was only due an award on her part-time work – which would equate to 150 weeks of benefits payable at $66.15 per week, totaling $9,922.50.

In Gruzlovic, the Judge of compensation was reversed and the wage reconstruction was remanded for further proceedings. The Judge was asked to find out whether the accident and resulting residual disability “had any impact on the petitioner’s capacity or inclination to work full-time as opposed to part-time. Based on the fact that the claimant had only worked one day per week for the thirteen years leading up to the accident, the Appellate Court stated ‘there is no basis for an inference” that she would have pursued other full- or part-time jobs “but for” her partial disability. The Appeals Panel further stated “when an inference of a loss of potential full-time employment attributable to the accident is not available from the evidence presented, principles of fairness and equity developed to compensate for that lost potential are not implicated and reconstruction of wages is not appropriate.”  

The attorney’s at Stark & Stark are familiar with the issue of wage reconstruction. If you have questions about your case or would like to discuss your case in more detail, contact me for a free consultation here in my firm’s Lawrenceville, New Jersey office.     

Alisa Boll is a member of Stark & Stark’s Lawrenceville, New Jersey office, specializing in Accident & Personal Injury Law. For more information, please contact Ms. Boll.