Opinion ID: 2519638
Heading Depth: 2
Heading Rank: 7

Heading: adjustment in compensation rate

Text: Mr. Bauder argues that the workers' compensation administrator and subsequently the Board miscalculated the amount of temporary total disability benefits he was entitled to. Under AS 23.30.185, the compensation rate for temporary total disability benefits is calculated by taking 80% of the injured employee's spendable weekly wages. An employee's spendable weekly wages are defined in former AS 23.30.220(a), which at the time of Mr. Bauder's injury, provided: (a) The spendable weekly wage of an injured employee at the time of an injury is the basis for computing compensation. It is the employee's gross weekly earnings minus payroll tax deductions. The gross weekly earnings shall be calculated as follows: (1) the gross weekly earnings are computed by dividing by 100 the gross earnings of the employee in the two calendar years immediately preceding the injury; (2) if the employee was absent from the labor market for 18 months or more of the two calendar years preceding the injury, the board shall determine the employee's gross weekly earnings for calculating compensation by considering the nature of the employee's work and work history, but compensation may not exceed the employee's gross weekly earnings at the time of injury[.] The administrator calculated Mr. Bauder's spendable weekly wage under AS 23.30.220(a)(1). The administrator determined that Mr. Bauder had gross earnings over the previous two calendar years before the accident of $23,563.00. Eighty percent of this number after deducting payroll taxes and dividing by 100 as required by the statute is $157.34. [135] The Board agreed with this calculation because it found that Mr. Bauder was absent from the labor market less than 18 months during 1991 and 1992. [136] Mr. Bauder argues that the Board should have calculated his spendable weekly wage under AS 23.30.220(a)(2) because he claims he was absent from the labor market for 18 months in 1991 and 1992 while he was a student in North Dakota. The issue then is whether there is substantial evidence to support the Board's finding that Mr. Bauder was absent from the labor market for less than 18 months during 1991 and 1992. The Board has interpreted 18 months or more of the two calendar years preceding the injury to mean working less than 183 days of the two previous years or less than 1040 hours of work during those two years. [137] The Board concluded that Mr. Bauder worked 13 weeks in 1991 and roughly 18 weeks in 1992. Therefore, according to the Board's calculations, Mr. Bauder was present in the labor market for a total of 31 weeks, or 7.75 months in 1991 and 1992. [138] The Board's calculations appear to be supported by substantial evidence. The evidence establishes that Mr. Bauder worked for Alaska Airlines for approximately 12 weeks in the summer of 1991 and he commercial fished for one or two weeks. Similarly, in 1992, the evidence establishes that Mr. Bauder again worked for Alaska Airlines for approximately 12 weeks over the summer and commercial fished for one or two weeks. Additionally, he worked at Alaska Airlines for about 10 days during the Christmas holiday in 1992. This evidence establishes that Mr. Bauder was employed for at least 28 weeks (seven months), or to put it in terms of AS 23.30.220(a)(2), Mr. Bauder was absent from the labor market for 17 months during 1991 and 1992. [139] Although the court finds that Mr. Bauder worked for three fewer weeks than the Board, this does not change the Board's determination that AS 23.30.220(a)(2) does not apply. Even by the court's more conservative calculations, Mr. Bauder was not absent from the labor market for 18 months or more of the two calendar years preceding the injury. As an alternative method of determining whether AS 23.30.220(a)(2) applies, the Board calculated the number of hours that Mr. Bauder worked in 1991 and 1992. The Board found that Mr. Bauder worked 1705 hours during these two years. In arriving at this conclusion, the Board relied on Mr. Bauder's testimony that he worked on average 55 hours a week. [140] This calculation is problematic because it appears that Mr. Bauder's answer about the number of hours he worked had to do with the summer of 1993. [141] The number of hours worked by Mr. Bauder in 1993 is not relevant. The issue is the number of hours worked in the two calendar years preceding the injury, 1991 and 1992. Another way to calculate the number of hours Mr. Bauder worked in 1991 and 1992 is to divide his income by his hourly wage. In 1991, Mr. Bauder earned $6,131.57 [142] at Alaska Airlines and was paid $9.70 per hour. [143] Thus, he worked approximately 632 hours in 1991 at the airline. Similarly, in 1992, Mr. Bauder earned $8,355.94 [144] at Alaska Airlines and was paid $11.63 per hour. [145] Thus, he worked approximately 718 hours in 1992. Based on his yearly earnings and hourly wage, Mr. Bauder worked for a total of approximately 1350 hours for Alaska Airlines in 1991 and 1992. But, as pointed out by Mr. Bauder, this calculation is also problematic because it fails to take into account overtime pay. Similarly, Mr. Bauder asserts that because he sometimes worked only part-time, and not seven days a week, the court should subtract some workdays from the total concluded by the Board. The administrator argued and the Board found that Mr. Bauder bore the burden of proof on these issues and that he failed to provide the evidence that would establish that he was absent for more than 18 months over those two years. Mr. Bauder forcefully argues that this was a misapplication of the burden of proof. He also argues that applying this formula to his circumstances does not address his actual loss and therefore is unconstitutional. But the court need not resolve these disputes because even if the Board applied subsection (a)(2) of the statute, the result would be the same. The Alaska Supreme Court has determined that AS 23.30.220(a)(1) may be unconstitutional in certain circumstances. In Gilmore v. Alaska Workers' Compensation Board, [146] the court expressed its concern that the formula may, in some cases, lead to an unfair earning determination. The court explained: Because this formula divides the employee's total gross wages over the two year period by 100 regardless of how many weeks the employee actually worked during this period, the employee's actual wage earning capacity during periods of employment is reduced in proportion to any period in which the employee was unemployed for any reason. The resulting benefits therefore may only be randomly related to the injured worker's actual loss. This formula applies regardless of any discrepancy, no matter how large, between the result of the formula and the actual wages lost by the employee during the period of his or her disability. [147] But the Board specifically addressed this issue. The Board determined that: The employee's tax records and his testimony show the employee's work for the employer during 1991 and 1992 was reasonably consistent with his earnings and pattern of work for the period of the disability. We find that the application of AS 23.30.220(a)(2) would not have substantially altered his compensation rate, in any event. The employee had a consistent pattern over a number of years, working for this employer and going to college to prepare for career employment. The employee moved into aviation career (or career preparation) work almost immediately after graduation. If we consider the nature of the employee's work and work history under AS 23.30.220(a)(2), we find the employee would have continued the pattern of work and study during the period he received [temporary total disability] benefits. [148] The reliability of Mr. Bauder's past work history as a predictor of his earning potential during the time he is entitled to temporary total disability benefits presents a factual issue. Therefore, the court must determine whether the evidence relied on [by the Board] was substantial in light of the record as a whole. [149] A primary purpose of Alaska's workers' compensation laws is to predict accurately what wages would have been but for a worker's injury. [150] Under Gilmore the issue is whether Mr. Bauder's past work history is an accurate predictor of his future earning capacity. [151] [W]here past wage levels are accurate predictors, the Board must apply the statutory formula [AS 23.30.220(a)(1)]. [152] The Board found, and Mr. Bauder does not dispute, that in 1991 and 1992 Mr. Bauder worked as a seasonal employee for Alaska Airlines. However, Mr. Bauder disagrees with the Board's conclusion that he would have continued to attend school and work as a seasonal employee during the time he received temporary benefits. Mr. Bauder argues that the Board ignored his testimony that he would have foregone school and accepted a full-time yearly position working as a ramp agent had it been available. [153] Further, Mr. Bauder testified that by 1995 or 1996 he would have had enough seniority to hold a full-time position. [154] Mr. Bauder correctly notes that the Alaska Supreme Court has recognized that  `intentions as to employment in the future are relevant to a determination of future earning capacity' in determining proper compensatory awards [155] and that [l]imited working hours following injury are not particularly relevant to a determination of a worker's probable work patterns had no injury been sustained. [156] But there is substantial evidence in the record to support the Board's conclusion that the temporary benefits accurately reflect Mr. Bauder's wage loss because of the injury. Mr. Bauder has wanted to fly since at least 1988. His initial interest in working for Alaska Airlines was to pursue this goal. By 1990, he started a work pattern that would allow him to achieve his goal. He began college to pursue a degree in aviation administration and he started to fly. He went to school during the school year, and like untold numbers of other college students, he worked during the summers and, sometimes, over the Christmas school breaks to support his education. Mr. Bauder was never a full-time, year-round employee and for good reason. Working as a ramp agent would not have allowed him to get the education and flying time he needed to be a pilot. [157] He was a seasonal employee who worked to support his college education. To require Alaska Airlines' insurance company to pay him benefits as if he were a full-time, year-round employee would not accurately reflect Mr. Bauder's work history. In addition, according to Alaska Airlines workers' compensation manager Donna Eglund, there were no full-time ramp-agent positions available for Mr. Bauder. [158] In light of these factors, the Board's conclusion that Mr. Bauder would have continued to attend school full-time while working seasonally for Alaska Airlines is supported by substantial evidence. Finally, Mr. Bauder argues that the disparity between his weekly earnings prior to his injury [159] and his weekly compensation rate of $157.34 is unconstitutional because it is grossly unfair. However, Gilmore does not stand for the proposition that a discrepancy between what an employee was earning at the time of his injury and his compensation rate under AS 23.30.220(a)(1) makes the application of the statute unconstitutional. [160] Instead, the goal is to compensate injured workers based on their actual losses. [161] As already discussed, it is undisputed that during the two years prior to his injury, Mr. Bauder was a college student and a seasonal employee [162] who worked during the summers in 1991 and 1992 and during the Christmas holiday in 1992. Therefore, Mr. Bauder's employment with Alaska Airlines in 1991 and 1992 accurately reflected the circumstances existing at the time of his injury. [163] Under either subsection (a)(1) or subsection (a)(2) of AS 23.30.220, the temporary total disability benefits were an accurate reflection of Mr. Bauder's wage loss. [164]