Opinion ID: 719804
Heading Depth: 3
Heading Rank: 1

Heading: Award of Benefits

Text: 7 Permanent partial disability benefits are intended to compensate an injured employee for loss of earning capacity, which is calculated by comparing the employee's post-injury wage-earning capacity with his pre-injury average weekly wages. 33 U.S.C. § 908(c)(21). If the wage-earning capacity is less than the average weekly wages, the employee is entitled to disability benefits equal to two-thirds of the difference. Id. 8 We first address SSA's contention that Sproull is not entitled to disability benefits because his wage-earning capacity, as represented by his actual earnings, is greater than his average weekly wages. An employee's wage-earning capacity is determined by actual earnings only if these earnings fairly and reasonably represent his wage-earning capacity. 33 U.S.C. § 908(h). Otherwise, the ALJ must determine an amount representing the employee's reasonable wage-earning capacity. Id. Here, the ALJ found that Sproull's actual wages are not a fair and reasonable measure of his post-injury earning capacity because wage rates increased approximately fifteen percent after Sproull was injured. The ALJ therefore reduced Sproull's post-injury actual earnings by fifteen percent and used this adjusted amount in determining benefits. 9 Substantial evidence exists in the record to support the ALJ's finding that Sproull's actual earnings are not a fair and reasonable measure of his wage-earning capacity. The ALJ reasonably concluded that these earnings do not accurately project Sproull's loss of earning capacity because of an increase in wage rates. See Brady-Hamilton, 58 F.3d at 421. A disabled worker's post-injury earnings can only 'fairly and reasonably represent his wage-earning capacity' ... if they have been converted to their equivalent at the time of injury. LaFaille v. Benefits Review Bd., 884 F.2d 54, 61 (2d Cir.1989); see also White v. Bath Iron Works Corp., 812 F.2d 33, 35 (1st Cir.1987) (ALJ may take into account wage increases when calculating wage-earning capacity). We therefore conclude that the Board did not err by affirming the ALJ's calculation of Sproull's wage-earning capacity. 10 We next address Sproull's contention that the Board erred by modifying the ALJ's calculation of his average weekly wages. Under 33 U.S.C. § 910(c), which the parties agree governs the calculation of Sproull's average weekly wages, the ALJ is directed to determine an amount which reasonably represent[s] the annual earning capacity of the injured employee. This amount is then divided by fifty two, resulting in the employee's average weekly wages. 11 In this case, the ALJ included in the calculation of Sproull's average weekly wages the vacation pay Sproull earned in 1984, the calendar year prior to his injury, even though under the terms of the applicable collective bargaining agreement, Sproull did not receive this pay until April 1985, after the date of his injury. The April 1985 vacation pay was based on wage rates effective July 1, 1984. According to the ALJ, including Sproull's most recently earned vacation pay best reflects his future earning capacity had he not suffered the injury. 12 The Board reversed, concluding that the ALJ's reliance on vacation pay received after the date of the injury creates needless administrative problems. The Board reasoned that by including vacation pay received in 1984, even though earned in 1983, the parties and the ALJ would have been able to calculate more quickly the average weekly wages and resolve the disability claim. Although administrative convenience may possibly be relevant in some circumstances, here there were never any issues of inconvenience, confusion or delay in payment as hypothesized by the Board. Rather the ALJ was able accurately and properly to calculate Sproull's average weekly wages. After carefully reviewing the record, we conclude that the ALJ's calculation of Sproull's average weekly wages reasonably represents his annual earning capacity. See 33 U.S.C. § 910(c). The Board therefore erred by reversing the ALJ's determination. 13 There is no merit to SSA's contention that the vacation pay Sproull received in April 1985 constitutes post-injury earnings which are typically excluded from an employee's average weekly wage. Sproull earned the April 1985 vacation wages before his injury, from January 1 to December 31, 1984. Nothing in the LHWCA prevents the ALJ from including in the average weekly wage wages earned before, yet received after, the employee's injury. 14 Finally, we reject SSA's contention that its liability to Sproull for disability benefits should be offset by the vacation and holiday pay which it paid Sproull while he was receiving temporary total disability benefits. According to SSA, Sproull was overcompensated during this time because he did not lose any wages for those days on which he received holiday and vacation pay. This argument, however, is flatly rejected by the terms of the collective bargaining agreement. Under that agreement, Sproull would have received both wages and holiday pay if he could have worked on the holidays. In addition, vacation pay is not based on an employee actually taking a vacation.