9/21/2008
Mandatory Overtime Hours included in Average Weekly Wage
9-21-08

The 18 year battle over including or excluding overtime hours in the calculation of average weekly wage continues to rage. All Illinois benefits are derived from the workers "average weekly wage" in the 52 weeks preceding the accident. Accordingly, weekly earnings or weekly wages have been hotly contested as an area of dispute. Average weekly wages are used to calculate both temporary disability benefit rates and permanent disability benefits. Section 10 of the Illinois Workers Compensation Act clearly and specifically excludes overtime earnings in calculation of average weekly wage.

However, since 1990, in Edward Hines Lumber, mandatory overtime hours have been included where they form the "regular hours" of employment. There the worker for Hines Lumber was regularly required to work mandatory 10 hour days for 6 days a week as a condition of his regular employment. Since the overtime hours were mandatory and required as part of the "regular employment", the overtime hours were then included in the calculation of wages at the straight time rate of pay.

After that case, the Illinois Commission continued to exclude overtime earnings if either not regularly worked or if not mandatory. The Commission's definition of "regularly worked" generally included overtime hours at straight time rate of pay if the worker "regularly worked" overtime in more than 50% of the weeks or where the overtime was mandatory. The Illinois Courts have also consistently excluded overtime hours that were not mandatory as a condition of employment or which were not part of a set number of hours or regularly worked each week as part of the regular employment. Edward Don (2003) and Freesen (2004).

Last year in Airborne Express (March 07), the Appellate Court said that merely working voluntary overtime on a regular but voluntary basis, is definitely excluded in calculation of average weekly wage otherwise, the overtime exclusion in Section 10 of the Act would be completely meaningless. Some attorneys have argued that under Airborne the overtime hours must be excluded unless both mandatory and consistently regularly worked but that does not comport with the prior case law under Freesen and Don or prior Commission decisions.

Shortly after Airborne, the Commission decided Terrell v Jacksonville (07 IWCC 1319, October 07) where the Commission said that to include the overtime hours, the worker must show that the overtime was either regular and consistent or mandatory. In Terrell, a mental health technician was required to work overtime because the facility was short staffed and the employer did not deny the overtime was mandatory so the Commission included the overtime. In Lockhart v Dominick's (08 IWCC 318, March 2008) a delivery driver testified he was required to finish deliveries and some of his overtime hours worked were in fact mandatory but he failed to prove the exact amount of the mandatory overtime hours so the overtime hours were excluded. In Heffner v Little Lady(08 IWCC 510, May 08) the Commission also denied including the overtime hours for a maintenance supervisor where the overtime hours were not shown to be mandatory or part of the regular hours of employment.

In a reading of the case law, it looks like the definition for exclusion of overtime under Section 10 is much more easily defined than in considering all the situations where overtime hours might or should be included in calculation of wages. The Court in Airborne clearly said that they have consistently held the Section 10 exclusion in calculation of wages excludes overtime hours where the worker is not required to work the overtime as a condition of employment (i.e. mandatory) or excludes overtime hours which are not part of a set number of hours consistently worked each week.

The nuance in terms in overtime wages is often misunderstood. Workers and employers should both be concerned with proper calculation of average weekly wage and they should both be encouraged to contact an experienced workers compensation attorney for consultation given that a fair amount of money can be involved in temporary disability benefits or permanent partial benefits. Especially large amounts of money can be involved in long term payments of wage differential benefits and in claims for permanent total disability, both of which can last for the full lifetime of the worker.

Chicago Workers Compensation Attorneys -- http://WC-Chicago.com -- 9-21-08
Posted by WorkComp Chicago at 11:01 AM