Wis.LIRC WC Decision: Rudolf - April 30, 1998 - ND � 4.14 - Persons Under Age Twenty-seven - Presumption of Maximum Earnings - rebuttable presumption of statutory maximum - even if rebutted, presumption that wage at 27 would be the maximum has weight as an inference

STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

NEAL RUDOLF, Applicant

OLSTEN OF MILWAUKEE INC, Employer

AETNA CASUALTY & SURETY CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 88058591

The administrative law judge issued his findings of fact and interlocutory order in this case on August 26, 1997, following a hearing on August 5, 1997. The employer and the insurer (collectively, the respondent) submitted a timely petition for commission review of the administrative law judge's findings and order. Thereafter, both the respondent and the applicant submitted briefs.

Prior to the hearing, the respondent conceded jurisdictional facts and a compensable injury on September 30, 1988 which resulted the applicant's permanent total disability. The employer paid benefits documented by a WC-13, at a rate of $106.67 per week, based an average weekly wage of $160.

The applicant, however, contends that he is entitled to compensation based on a higher average weekly wage, citing Wis. Stat. � 102.11(1)(g). The parties indicated at the hearing that they were awaiting the resolution of that issue to calculate the exact amount of compensation owed, subject to a reverse social security offset.

The commission has carefully reviewed the entire record in this case, including the briefs submitted by the parties. After consulting the administrative law judge concerning the credibility and demeanor of the witnesses, the commission hereby sets aside his findings of fact, conclusions of law, and interlocutory order, and substitutes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The applicant, who was born on December 13, 1961, suffered a head injury while operating a hydraulic straightening press in September 1988. He is now permanently and totally disabled. The issue now before the commission is the limited question of the amount of his average weekly wage.

An injured worker's average weekly wage is the touchstone on which the disability compensation rates are set. Normally, the average weekly wage approximates a worker's actual weekly wage at the time of injury, subject to a maximum figure. A special rule applies to workers who are under 27 years of age when injured, however. Wis. Stat. � 102.17(1)(g) provides:

"If an employe is under 27 years of age, the employe's average weekly earnings on which to compute benefits accruing for permanent disability or death shall be determined on the basis of the earnings that such employe, if not disabled, would probably earn after attaining the wage of 27 years. Unless otherwise established, said earnings shall be taken as equivalent to the amount upon which maximum weekly indemnity is payable."

As the ALJ pointed out in his decision, the court of appeals has written:

"The statute does not ask the Commission to determine what a twenty-seven year old would have received for the work the younger employee was doing at the time of injury; rather, the statute directs the Commission to determine what the younger worker would probably earn in the job that he or she would hold after attaining the age of twenty-seven. In adopting sec. 102.11 (1)(g), the legislature recognized that a young worker's wages may be utterly inadequate to form a reliable basis on which to compute his or her probable earnings as a mature member of the labor force. [Citation omitted.] In fixing an award to a young employee, the commission need not assume that the injured worker would have remained in the same job or at the same company until the age of twenty-seven. In addition to the actual earnings at the time of injury, the commission may consider the qualifications of the employee and his or her educational experience."

Evans Brothers v. LIRC, 113 Wis. 2d 221, 227-28 (Ct. App., 1983).

Thus, the "average weekly wage" for workers under the age of 27 is rebuttably presumed to be the statutory maximum under Wis. Stat. � 102.11(1). Even if the employer rebuts the presumption that the applicant's wage at 27 would be the statutory maximum, the presumption has continuing weight as an inference under Wis. Stat. � 903.01. (1 )

In this case, the applicant was 26 years, nine months old when injured in 1988. He withdrew from high school before graduating. His high school grades were mostly D's and F's. He did obtain a GED in January 1985. As compared to other individuals taking the GED, his scores were in the 50th to 60th percentile range.

Prior to his injury, the applicant worked in manufacturing and construction jobs as punch press operator, steam cleaner, and construction laborer. He also worked as a parts inspector and forklift driver. His hourly wage from 1985 to 1988 varied from $3.75 per hour to $5.00 per hour. Prior to 1988, the applicant never made more than $4,000 in a year. In 1988, though, the applicant had earned $8,145, apparently to the point of his injury in September of that year. See the last three pages of Exhibit 5.

The applicant was earning $4.00 per hour when injured. At the time, he was working for the named employer, a temporary help agency, for a client named Intertractor. The employer billed Intertractor $6.80 per hour for the applicant's services. At the time of the applicant's injury in 1988, Intertractor offered beginning wages to its own employes at $7.00 per hour, with a $0.35 shift differential. Exhibit B.

The applicant was taking a correspondence course to become a paralegal at the time of his injury. The commission, like the presiding ALJ, concludes the applicant most likely would not have had success with the program.

The record contains reports and testimony from vocational experts. The applicant's expert, Keith Schutz, opined the applicant could earn in the range of $480 to $630 per week in jobs in various industries. Mr. Schutz opined the figure of $533 was most representative of the applicant's earning capacity in 1988 dollars.

However, Mr. Schutz admits the average wage in all manufacturing occupations was only $455 per week. In light of the applicant's employment history, the commission cannot credit Mr. Schutz's opinion that the applicant would reasonably be expected to earn significantly more than that average. Indeed, in 1988, the year the applicant turned twenty-seven, the applicant was on track to about earn $10,860. (2 ) This works out to an average weekly wage of considerably less than Mr. Schutz's figure of $533.

The employer's expert, Leanne Panizich, opines the applicant's pre-injury earning capacity was in a weekly range of $280.28 to $329.72. These figures are determined by averaging the wages in various unskilled factory jobs for the years 1988 and 1990. See report of Panizich, Exhibit 2, page 2. The range given by Ms. Panizich is below the $455 average for manufacturing jobs given by the applicant's expert. However, the range includes what Ms. Panizich states was the average wage for 25 to 34 year old high school graduates in the spring of 1990: $15,384.00 or about $296 per week.

In analyzing this case, the first question is whether the employer has rebutted the statutory presumption of a maximum wage. The applicant has a high school equivalency degree, but little or no vocational training. He has never made more than $5.00 per hour, at least not for any sustained period. The applicant was earning only $4.00 per hour when he was almost 27. The statutory presumption of a maximum wage has been rebutted.

The second question is how much the applicant would probably earn after attaining the age of 27. The opinion of the respondent's vocational expert, Ms. Panizich, is more credible on this point than that of the applicant's expert. Given the continuing inferential weight of the statutory presumption of the maximum wage, the commission finds that the applicant's average weekly wage should be set at the high end of the Ms. Panizich's estimated wage range, or $329.72.

The record indicates that a reverse social security offset may be appropriate in this case; jurisdiction is reserved to determine the appropriate award and fee in light of the offset and benefits paid to date. Jurisdiction is also reserved for any and all disputes and future claims, other than the contested wage issue decided by this decision.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

INTERLOCUTORY ORDER

The findings and order of the administrative law judge are modified to conform to the foregoing and, as modified, are affirmed in part and reversed in part. The applicant's average weekly wage is determined to be $329.72, resulting in a weekly indemnity rate for temporary disability and permanent total disability at $219.81.

Jurisdiction is reserved for further orders and awards as are consistent with this decision.

Dated and mailed: April 30, 1998
rudolne.wrr : 101 : 7 ND � 4.14

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

The commission conferred about witness credibility and demeanor with the administrative law judge (ALJ) who presided at the hearing. Transamerica Ins. Co. v. ILHR Department, 54 Wis. 2d 272, 283-84 (1972). The ALJ found the applicant to be a credible witness whose memory was understandably impaired following the work injury. The ALJ also stated he viewed this a close case, but found the maximum wage based on the strength of the statutory presumption under Wis. Stat. � 102.11(1)(g).

The commission does not question the ALJ's impression of the applicant's credibility. However, the key issue here is not the credibility of the applicant, but of the vocational experts who did not testify at the hearing. For the reasons explained above, the commission found the report of Ms. Panizich to be more credible, and modified the ALJ's decision accordingly.

cc: ATTORNEY LOIS A MONEFELDT
SPINDLER ROITBURD SCHWEMER & MUNSON

ATTORNEY RUSSELL W DEVITT
SOFFA & DEVITT

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Footnotes:

(1)( Back ) See Neal & Danas, Worker's Compensation Handbook, � 4.14 (4th ed. 1997).

(2)( Back ) This is determined by extrapolating from the $8,145 he had earned to the point of injury (assuming the $8,145 figure only reflects earnings to September 30.)