Is it Really De Minimus?

Monday, December 23, 2013 | 0

There is a workers’ compensation bill proceeding through Florida's legislative committee process already. It is Senate Bill 444 and there is a similar bill in the House, House Bill 271. There are a variety of provisions in these two bills, many dealing with “stop work” orders and penalties. But of interest to the broad workers’ compensation marketplace, there is a mathematical revision or clarification that is academically interesting.

In the Fall 2013 News and 440, there is a small article I penned (is that still a viable verb in the 21st Century?) after the 1st District Court of Appeal rendered Escambia County School District v. Vickery-Orso, 109 So.3d 1242 (Fla. 1st DCA 2013) last April. It includes more of the math and the analysis of the question of whether pennies and rounding are significant. News and 440, Fall 2013.

This was the compensation rate case involving calculations, percentages, rounding, and more. I have often heard attorneys say that "if I could do math, I would have gone to medical school." Several minutes on the worldwide web failed to locate the source of that quote. I did not originate it, and I cannot find who did, but I have often agreed with it.

I have been amazed over the years at how often I have become involved in mathematics. I look back on the times I asked "when will I ever use this" in high school and college math classes. Though I never got a great answer to that, it turns out I have used a great deal of math in my career. In a nice piece titled Dangerous Curves Ahead, attorney and mediator Michael Orfinger expresses some thoughts on using math in mediation. I recommend the article as it makes one think.

Returning to SB444/HB271, the logic seems to be a simplification of the mathematics required in workers’ compensation. Currently, section 440.15(1)(permanent total), 440.15(2)(temporary total), 440.15(4)(temporary partial ) and 440.16 (compensation for death) use “66 2/3” as the factor to be applied to the Average Weekly Wage (AWW) in determining benefits due. After Vickery-Orso, I have discussed the Court's calculation with a variety of attorneys and other market participants. Not all agree with the Court’s math. Whether one agrees or not, however, the Court's math is reasonably clear. It is a road map for workers' compensation professionals.

SB444/HB271 would add the phrase “or 66.67” to each iteration of “66 2/3,” so that they would read (for example) “66 2/3 or 66.67 percent of the average weekly wage shall be paid to the employee . . ..” 440.15(1). Similarly, in one portion of the compensation for death section, “33 1/3” would be changed to “33 1/3 or 33.33 percent for each child.”

Eliminating fractions from the calculation might make the math somewhat easier (does anyone have a 1/3 or 2/3 key on their calculator?). The Court in Vickery-Orso has explained the calculation under the current statute though and it seems reasonably clear from this decision. Will the disjunctive “or” in SB444/HB271 be helpful, or will there be confusion over the application? In other words, as the bill is phrased, would either calculation be acceptable in any particular case? Would it matter that one carrier elects to use fractions and another carrier elects to use percentages.

The difference between the two calculations would be pennies. But pennies may be significant. In Vickery-Orso, the court explained "these differences of two or three cents become significant when repeated over multiple payments, and are even more significant when they form the basis of awards of penalties, interest, costs, and attorney’s fees."

Under the proposed revision of SB444/HB271, who decides which of the two calculations is appropriate? Is the intent to give carriers the choice, and if they are correct under either calculation, that is appropriate? If so, they are likely to use that which yields the lower figure. Is the choice the Claimant's? If so they are likely to use the calculation leading to the higher figure. If simplification is the goal, would it make more sense to change to the percentage calculation instead of the fraction? Would that solve more problems than simply adding an alternative with "or" and its potential for further litigation and uncertainty? Is there a value in uniformity and clarity as well as value in simplicity?

David Langham is deputy chief judge of the Florida Office of Judges of Workers' Compensation Claims. This column was reprinted with his permission from his Florida Workers' Comp Adjudication blog.