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

DOUGLAS SCHMIDT, Applicant

CARNES CO, Employer

LIBERTY MUTUAL FIRE INS CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1996064176

An administrative law judge (ALJ) for the Division of Workers Compensation in the Department of Workforce Development issued a decision awarding loss of earning capacity at 16.5 percent in this matter. Both parties have filed timely petitions for review, and submitted briefs on the petitions.

The commission has considered the petitions and the positions of the parties, and it has reviewed the evidence in this case. Based on its review, the commission makes this

ORDER

This case is remanded to the Division of Worker's Compensation for further hearing and decision on the applicability of Wis. Stat. § 102.44(6) to the applicant's claim for loss of earning capacity, and upon the claim for loss of earning capacity itself. With respect the applicability of Wis. Stat. § 102.44(6), the employer shall provide weekly pay figures for the applicant, including if possible wage figures for the year preceding the date of injury and for the period beginning after his return to work subject to permanent restrictions as an Assembler C in November 1997.

Dated and mailed June 30, 1999
schmidt.wpr : 101 : 5 ND § 5.23

/s/ David B. Falstad, Chairman

Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

1. Overview.

The applicant injured his back on December 2, 1996, while working for the employer as a "Spinner A." At the time of injury he was earning $12.79 per hour, (1) having received a raise from $12.49 on November 1, 1996.

After an unsuccessful discectomy procedure, the applicant returned to full time work subject to permanent restrictions on or about November 9, 1997. He worked briefly at his old job as a Spinner A at an increased wage of $13.09 per hour. Because of his restrictions, however, he was put in work as an Assembler C, which is a lower-paying job that is less physically demanding. He now earns $10.92 per hour.

The applicant testified he received overtime prior to the injury, but now is no longer assigned overtime work. The employer's witness, human resources manager Julie Sundby, testified that the applicant worked between zero and 16 hours per week before his injury; that there were relatively more overtime hours plant-wide in 1997 than 1996, but 68 percent less in 1998; and that it was difficult to generalize whether Spinners as a class worked more overtime than Assemblers, or vice versa. September 3, 1998 transcript, page 52 et seq.

The applicant's treating doctor and the independent medical examiner agree that the applicant's permanent partial disability on a functional basis is seven percent of permanent total disability. They also agree on a forty-pound lifting restriction. The applicant's vocational expert rates loss of earning capacity at 40 to 45 percent. The employer and insurer (collectively, the respondent) did not provide a vocational expert.

2. Discussion.

The issue in this case is the extent of loss of earning capacity (LOEC). Comparing the applicant's wage of $13.09 (which is what he could have earned had he continued to work as a Spinner A) to the wage of $10.92 (which he earned after his injury in the lighter Assembler C work), the ALJ arrived at 16.5 percent LOEC. The respondent appeals, contending that the issue of LOEC should never have been reached under Wis. Stat. § 102.44(6) as the applicant was re-employed at more than 85 percent of his pre-injury wage. The applicant, for his part, contends that he was re-employed at less than 85 percent of his pre-injury wage, so the LOEC award should be affirmed. The applicant raises several computational errors in his appeal.

An award for loss of earning capacity is based on a comparison of a workers' pre- injury earning capacity with his post-injury capacity, and takes into account numerous factors including actual wages, age, education, training, efforts to find suitable work, willingness to relocate, and transferability of skills. See Wis. Adm. Code § DWD 80.34. While pre-injury and post injury wages are a factor in determining the LOEC award, LOEC is generally not based simply on straight wage comparison.

However, an award for loss of earning capacity may not be made if the time-of- injury-employer re-employs an injured worker at 85 percent of the worker's time- of-injury wage. Specifically, Wis. Stat. § 102.44(6)(a), (b) and (f) provide:

"102.44(6)(a) Where an injured employe claiming compensation for disability under sub. (2) or (3) has returned to work for the employer for whom he or she worked at the time of the injury, the permanent disability award shall be based upon the physical limitations resulting from the injury without regard to loss of earning capacity unless the actual wage loss in comparison with earnings at the time of injury equals or exceeds 15%.

"(b) If, during the period set forth in s. 102.17 (4) the employment relationship is terminated by the employer at the time of the injury, or by the employe because his or her physical or mental limitations prevent his or her continuing in such employment, or if during such period a wage loss of 15% or more occurs the department may reopen any award and make a redetermination taking into account loss of earning capacity.

"(f) Wage loss shall be determined on wages, as defined in s. 102.11. Percentage of wage loss shall be calculated on the basis of actual average wages over a period of at least 13 weeks."

In this case, the respondent is entirely correct in pointing out that the applicant's post injury hourly wage $10.92 is more than 85 percent of his pre-injury wage of $12.79. (2) Or stated another way, the $1.87 decrease (or loss) in wage is 14.63 percent of the pre-injury wage. Thus, the employer argues, Wis. Stat. § 102.44(6)(a) bars the applicant's LOEC claim.

The applicant asserts that the calculation instead should be based on the $13.09 per hour wage the applicant would now earn as a Spinner if he could still work as one. However, that seems to overlook the express instruction in Wis. Stat. § 102.44(6)(a) to compare the actual wage loss with "earnings at the time of injury."

In response, the applicant asserts that that using earnings at the time of hearing negates the commons sense recognition that wages increase over time. While that may be true, the statute plainly requires comparison to wages at the time of the injury. Further, the phenomenon of increasing wages over time is better addressed in the actual LOEC award itself, rather than under Wis. Stat. § 102.44(6)(a). That section does not really purport to measure or compensate the lost capacity over time from the injury, but only sets a threshold of actual wage loss as a precondition to an LOEC award.

The applicant also argues that if the drafters of Wis. Stat. § 102.44(6)(a) meant to simply compare the wage at the time of injury, it would not have incorporated the term "actual wage loss." Instead, the applicant, suggests, Wis. Stat. § 102.44(6)(a) could have simply used a phrase like "unless the wage the employe is paid when he returns to work, in comparison with earnings at the time of injury, equals or exceeds 15 percent."

However, the applicant's assertion cannot be sustained. The reference to "wage loss" is made because the statute refers to a 15 percent loss. The language suggested by the applicant would work if the statute were based on the post-injury wage itself (presumably at 85 percent of the pre-injury wage), rather than the estimate of the wage loss (at 15 percent.) Either way, a 15 percent post-injury wage loss and an 85 percent post-injury wage are just two ways of saying the same thing.

However, the commission notes that the parties rely upon hourly wage figures rather than weekly wage figures to measure the loss upon the applicant's return to work. Particularly in light of the testimony about overtime, this poses a problem. If the applicant is in fact being passed over for overtime, or is required to work in a job where there is less overtime, (3) his wage loss on a weekly basis may exceed the fifteen percent threshold.

Further, Wis. Stat. § 102.44(6)(g) suggests that wage loss should be based on weekly, rather than hourly, figures. Indeed, the commission normally tries to base its calculations under Wis. Stat. § 102.44(6)(a) on weekly wages. (4) A commentator on Wisconsin worker's compensation law has also described using the weekly wage under Wis. Stat. § 102.44(6)(a) as more reasonable than using the hourly wage. (5) Consequently, the commission remands this case to allow determination of the applicability of Wis. Stat. § 102.44(6)(a) based on weekly wages. Because the use of weekly wages for the purposes of Wis. Stat. § 102.44(6)(c) may affect the way the parties chose to present their cases on the LOEC claim itself, that matter also is remanded.

cc: ATTORNEY JAMES N YOUNGERMAN
MONTIE YOUNGERMAN & DUTCH

ATTORNEY JEFF OCONNOR
LAW OFFICE OF JEFFREY T OCONNOR

[Subsequent Commission decision]

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Footnotes:

(1)( Back ) The employer's brief inaccurately states the time of injury wage to be $12.92.

(2)( Back ) $10.92/12.79 equals 85.37 percent.

(3)( Back ) It is true that Wis. Stat. § 102.44(6)(g) refers to calculation based on Wis. Stat. § 102.11, and that Wis. Stat. § 102.11(1)(a) excludes "overtime." But the department's explanatory footnote, means time beyond that normally worked by the employe. See note 37 in DWD's Workers Compensation Act of Wisconsin (WKC-1-PR)R. 2/99). If a worker normally works over forty hours, then, this type of "overtime" is counted. Here the testimony of Ms. Sundby was that overtime was not usual, though it varied from week to week.

(4)( Back ) Jakubiak v. Wrought Washer Mfg, Inc, WC case no. 1994033075 (LIRC, April 12, 1999), note 5.

(5)( Back ) See William R. Sachse, Jr., "Methods of Comparing Wages under Wis. Stat. Sec. 102.44(6)" at www.pjmlaw.com