Maryland Court of Special Appeals Considers Average Weekly Wage: Richard Beavers Construction, Inc. v. Wagstaff, 236 Md.App. 1 (2018)

In Richard Beavers Construction, Inc., et al. v. Dexter Wagstaff, the Court of Special Appeals issued an opinion that may affect the calculation of a claimant’s Average Weekly Wage (AWW) in some limited circumstances. The claimant, Dexter Wagstaff, was hired just six weeks before his accidental injury. He was hired as a full-time employee and expected to work 40 hours per week. Unfortunately, during the first six weeks of his employment, Mr. Wagstaff only worked an average of 16.75 hours per week as a result of inclement weather. The issue before the Court concerned the proper determination of AWW in this situation.

At a hearing before the Maryland Workers’ Compensation Commission, the employer and insurer asserted that the AWW calculation should be based upon the average of Mr. Wagstaff’s actual earnings for the six weeks that he had actually worked. Mr. Wagstaff argued his AWW calculation should instead be based upon an expected 40-hour work week. The Commission agreed with Mr. Wagstaff and calculated his AWW based upon a 40-hour work week. The employer and insurer appealed to the Circuit Court for Talbot County, where the Commission’s decision was upheld. The employer and insurer again appealed to the Court of Special Appeals and asserted that both the decisions of the Commission and the Circuit Court were incorrect as a matter of law.

On Appeal, the employer and insurer relied on a “plain reading” of two provisions concerning the determination of AWW, Labor & Employment §9-602 and COMAR 14.09.03.06, and again asserted that Mr. Wagstaff’s AWW should be calculated from his actual earnings in the weeks preceding the accidental injury. Mr. Wagstaff argued that the AWW calculation used by the Commission was correct and accounted for an expected increase in his salary when working conditions were more favorable. To support his argument, Mr. Wagstaff relied upon Labor & Employment §9-602(a)(3). This section provides that if a covered employee establishes that, because of the age and experience of the employee at the time of the accidental injury, the wages of the covered employee could be expected to increase under normal circumstances, the expected increase may be considered when computing the AWW.

While the Court found a flaw in Mr. Wagstaff’s argument, pointing out that his expected increase in earnings had nothing to do with his age or experience as the statute requires, the Court did ultimately side with the claimant. Upon review of the two provisions addressing the determination of the AWW, the Court concluded the Commission may consider other evidence in addition to a 14-week wage statement when calculating the AWW.

In reaching its decision to uphold the Commission and the Circuit Court’s findings, the Court of Special Appeals considered that the employer hired Mr. Wagstaff for the stated purpose of working “full time” (meaning 40 hours a week) and Mr. Wagstaff suffered a disabling injury only a short period of time after being hired. The Court also noted that Mr. Wagstaff had worked substantially less than 40 hours per week prior to his injury and there were other circumstances calling into question whether the actual hours worked during that period accurately represented Mr. Wagstaff’s normal working hours.

Wagstaff demonstrates that, when there is a question as to the calculation of AWW, it may be beneficial for the parties to attempt to reach an agreement as to the amount of the AWW in advance of the first hearing.

For more information about this article, please contact Christopher J. Smith at 410.230.3069 or csmith@fandpnet.com.