Opinion ID: 1624713
Heading Depth: 1
Heading Rank: 3

Heading: The Rate of Compensation

Text: (a) The basis for computing the compensation (§ 287.250) The commission found that the claimant's compensation was properly determined pursuant to subdivision (5) of § 287.250. It computed her average daily earnings at $57.36, based on 18 days of employment for total compensation of $1,032.52, yielding annualized earnings of $11,472 under the 200-day rule and an average weekly wage of $220.62. The first six subdivisions of § 287.250 read as follows: (1) The compensation shall be computed on the basis of the annual earnings which the injured person received as salary, wages, or earnings if in the employment of the same employer continuously during the year next preceding the injury; (2) Employment by the same employer shall be taken to mean employment by the same employer in the grade in which the employee was employed at the time of the accident uninterrupted by absence from work due to illness or any other unavoidable cause; (3) If the injured person has not been engaged in the employment of the same employer for the full year immediately preceding the accident, the compensation shall be computed according to the annual earnings which persons of the same class in the same employment and same location (or if that be impracticable, of neighboring employments of the same kind) have earned during the period; (4) As to employees in employments in which it is the custom to operate throughout the working days of the year, the annual earnings, if not otherwise determinable, shall be regarded as three hundred times the average daily earnings in the computation; (5) As to employees in employments in which it is the custom to operate for a part of the whole number of working days in each year, that number, if the annual earnings are not otherwise determinable, shall be used instead of three hundred as a basis for computing the annual earnings; provided, the minimum number of days which shall be so used for the basis of the year's work shall be not less than two hundred; (6) In the case of injured employees who earn either no wage or less than the earnings of adult day laborers in the line of employment in that locality, the yearly wage shall be reckoned according to the average annual earnings of adults of the same class in the same (or if that is impracticable then of neighboring) employments;       The first five of these subdivisions are concerned with compensated employees. Our cases, consistently over the years, have held that subdivisions (1), (3), (4) and (5) are to be applied in descending order, and that these subdivisions collectively are designed to provide a basis for computation of the compensation for every employee who works for wages or salary. [3] (Subdivision (2) is definitional, and subdivision (6) has to do with uncompensated or minimally compensated employees.) Subdivision (1) applies to employees with one year of full time service to the present employer. It was early held in Coble v. Scullin Steel Co., 54 S.W.2d 777 (Mo.App. 1932), that this subdivision applied only to full time employees, and that employees who worked regularly but only part time did not work continuously within the compass of subdivision (1). Subdivision (3) applies also to full time employees with less than a year of service to the present employer and makes use of the earnings of full time employees in comparable employment. Inasmuch as the claimant was not a full time employee, neither (1) nor (3) applies to her case. The statute then commands us to have recourse to either (4) or (5). These subdivisions make use of the claimant's actual average daily earnings in the service of the present employer in order to compute an annualized wage, either of 300 days under subdivision (4) or a minimum of 200 days under subdivision (5). We postpone discussion of the distinction between the two subdivisions for the moment so as to better analyze the cases and provide guidance about a distinction which has proved troubling in the past. The point, for the present, is that one of the two must be used if the employee has not worked for the employer full time for a year and the annual earnings of a comparable full-time employee are not available. The employee is not relegated to the minimum compensation of $40 per week simply because proof under (1) and (3) is not available. [4] A court of appeals opinion ordinarily passes into limbo with the transfer of the case to this Court, but, because of the radical change in the law that court proposed, and similar expression in other authorities, we believe that discussion of the basic issues would be helpful. The court of appeals held that the claimant's compensation should be computed on a reduced basis because she was a part-time employee. Our cases consistently hold that there is no distinction between full-time and part-time employees and that all injured employees are to be compensated on the basis of annualized earnings, in accordance with one of the subdivisions of § 287.250. The court of appeals observed that, under the commission's award, this claimant stands to receive substantially more in compensation than she would have received in earnings had she not been injured. It points to a similar expression of concern in May v. U.B.C. Marketing, supra . The concern is misplaced. The workers' compensation laws provide a substitute for the common law action which an employee might otherwise maintain against an employer. [5] The act benefits both employers and employees. The employee is allowed sure compensation for injury arising out of and in the course of employment, free from the burden of establishing the employer's negligence and from the common law defenses of contributory negligence, [6] assumption of risk, [7] and the fellow servant doctrine. [8] The employer is relieved of the threat of open-ended awards for intangible damages. Workers' compensation is designed to provide compensation for loss of earning capacity, which is a proper element of common law damages [9] and is allowable without regard to the time worked in the past, prospects for future employment, or plans for working in the future. If part time employees were relegated to reduced compensation they would not be made whole for their loss. The court of appeals made substantial use of the treatise by Professor Arthur Larson on Workmen's Compensation. Larson suggests that some part time employees, especially those who limit their hours voluntarily, should be compensated at a lower rate than full time employees. He cites cases from many jurisdictions but, for some reason, discusses very few Missouri authorities even though we have substantial case law on the subject. [10] His discussion does not include analysis in depth of the varying statutory provisions of the several states, which may explain differences in result. It is clear that his suggestions are at variance with the uniform course of our decisions over a period of more than fifty years. Larson also cites cases from other jurisdictions which are consistent with our holdings and inconsistent with the views he advances. [11] His position certainly is not universally acclaimed. In Cross v. Crabtree, 364 S.W.2d 61, 67 (Mo.App.1962), the court held that compensation for death of an employee who limited his hours because he was drawing social security should be computed pursuant to subdivision (3), because the annual earnings of a comparable employee in similar employment were available. Judge Hunter gave a clear explanation of the basis for his holding as follows: In view of the provisions of subsection 3 of Section 287.250 which apply to the facts before us it is immaterial that the deceased was drawing social security or may have actually earned no more than $1,200 in the year next preceding his injury and death. This subsection establishes a comparative method of computation rather than one based on actual earnings.... This case is sharply criticized by Larson. His criticism indicates no reason for rejecting the holding, but simply demonstrates the sharp divergence between his views and those consistently expressed in our cases. We see no reason to depart from the uniform course of our decisions, which we believe to be correct in their application of the underlying statutory policy. Section 287.250 and its predecessors have remained substantially unchanged since 1925 even though there have been numerous amendments to other sections of the workers' compensation statutes. [12] Those who believe that the benefits available to part time employees should be substantially reduced should make their case before the general assembly, which has shown apparent satisfaction with the courts' construction of § 287.250. Person v. Scullin Steel Co., 523 S.W.2d 801, 803 (Mo. banc 1975); Messick v. Grainger, 205 S.W.2d 739, 741-42 (Mo.1947).