Opinion ID: 2518013
Heading Depth: 2
Heading Rank: 1

Heading: Calculating Workers' Compensation Benefits

Text: The Workers' Compensation Act establishes a formula for calculating workers' compensation benefits that proceeds in two steps. First, the ALJ determines the employee's average weekly wages (employee's AWW), which serves as the basis for computing disability benefits. § 8-42-102, C.R.S. (2009). Second, the ALJ sets the award the claimant will receive by statute, which depends in part upon the claimant's time of injury. See, e.g., § 8-42-105 (awards for TTD benefits); § 8-42-111 (awards for PTD benefits). We review each of these steps in turn. To determine an employee's AWW, the ALJ may choose from two different methods set forth in section 8-42-102. The first method, referred to as the default provision, provides that an injured employee's AWW be calculated upon the monthly, weekly, daily, hourly, or other remuneration which the injured or deceased employee was receiving at the time of injury. § 8-42-102(2). The default provision lists six different formulas for conducting this calculation, such as multiplying the monthly wage or salary at the time of the accident by twelve and then dividing by fifty-two. § 8-42-102(2)(a)-(f). The second method for calculating an employee's AWW, referred to as the discretionary exception, applies when the default provision will not fairly compute the [employee's AWW]. § 8-42-102(3). In such a circumstance, the ALJ has discretion to compute the [AWW] of said employee in such other manner and by such other method as will, in the opinion of the director based upon the facts presented, fairly determine such employee's [AWW]. [5] Id. After the ALJ determines the employee's AWW, either through the default provision or the discretionary exception, the ALJ applies the statutory limit on workers' compensation benefits and calculates the rate of the claimant's benefits. For both TTD and PTD benefits, this rate is the lesser of either sixty-six and two-thirds percent of the employee's AWW or ninety-one percent of the state's average weekly wage (state AWW). § 8-42-105 (awards for TTD benefits); § 8-42-111 (awards for PTD benefits); [6] § 8-47-106 (statute governing state AWW). The director of the Division of Workers' Compensation determines the state AWW on a yearly basis using the most recent figures about statewide average weekly earnings. § 8-47-106. We assume without deciding that the ALJ uses the state AWW in effect at the claimant's time of injury. See Simpson, 219 P.3d at 363-64; Pubanz v. State, W.C. No. 3-070-168, 1997 WL 651414, at  (Colo. Indus. Claim Appeals Office Sept. 9, 1997) (holding that the state AWW established on July 1 of each year is intended to be the basis for determining the maximum benefit rate for all injuries that occur during the following twelve months). Because the state AWW trends upwards over time, the claimants stand to receive a higher maximum rate of benefits if the ALJ sets their time of injury at a later date. See 17 Douglas R. Phillips & Susan D. Phillips, Colorado Practice Series: Colorado Workers' Compensation Practice and Procedure § 6.2 (2d ed. 2005 & Supp. 2009) (listing the state AWW from July 1, 1991, to present). The divisions of the court of appeals interpreted Avalanche Industries to mean that the time of injury includes the time of disablement, which might occur later than the time of the accident. Simpson, 219 P.3d at 362; Bennett, slip op. at 8.