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North Carolina Court of Appeals Holds That Calculations of Average Weekly Wage Must Be “Fair and Just” to Both Employer and Employee

August 25, 2017

The North Carolina Court of Appeals ruled that when calculating the average weekly wage of an employee, the calculation must be “fair and just” to both the employer and the employee.

In Ball v. Bayada Home Health Care, the plaintiff alleged to have suffered injuries to her left hand, bilateral knees, and right hip while employed as a certified nursing assistant (CNA) in February 2011. Her accident took place on the first day of work with a new patient — right after she had received a two-dollar wage increase. The plaintiff also alleged injuries to her bilateral knees stemming from a separate incident in May 2011. The defendants partially admitted and partially denied both claims, and the case was set for hearing in May 2015.

Following the hearing, the deputy commissioner concluded that the plaintiff suffered compensable injuries on both dates. He also determined that the appropriate method to determine the plaintiff’s average weekly wage was Method 5, as listed in N.C. Gen. Stat. § 97-2(5), which is the catch-all provision set forth in the statute. The defendants appealed the claim to the Full Commission, which held that the appropriate method for calculating the plaintiff’s average weekly wage was Method 3. The third method took into account only the plaintiff’s pre-injury part-time compensation at a lower hourly wage and did not consider her uncontested wage increase. As a result, the plaintiff appealed.

The North Carolina Court of Appeals, in its opinion, outlined the five different methods for calculating an injured worker’s average weekly wage. It noted that regardless of which method was used, it must produce an average weekly wage that is “fair and just” to both the employer and the employee. It explained that a “fair and just” result meant a calculation as close as possible to the amount the employee would have received through her work had she not been injured on the job. The court stated that by refusing to take into account her two-dollar wage increase, the average weekly wage calculated by the Full Commission under Method 3 caused an unfair and unjust result for the plaintiff. It therefore remanded the case to the Commission for an average weekly wage determination under Method 5.

The Court of Appeals also confirmed that the uncertainty of whether the plaintiff would continue to earn her wages at the increased rate should have no bearing on the average weekly wage determination, since that uncertainty would be no different from any other uncertainty surrounding her employment at will. As such, any kind of uncertainty surrounding an employee’s current hourly wage rate should not be taken into consideration when selecting a method of calculation.

This decision makes it clear that average weekly wage determinations must produce results that are “fair and just” to both parties. This means that whatever method the Commission uses for determining average weekly wage under N.C. Gen. Stat. § 97-2(5), the method must result in an average weekly wage as close to the amount the employee would have received but for her work-related injury. Any one particular method should not be used for calculation if it ignores an uncontested fact about the employee’s nature of employment at the time of her injury.

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