Grinberg: Calculating AWW in the Gig Economy

Tuesday, January 7, 2020 | 0

I'm well aware that with Assembly Bill 5 we might see the last days of Uber and Lyft — you know, those ventures that brought extra money and flexibility to drivers while making the rate of DUIs plummet in every city where they operated.

Gregory Grinberg

However, assuming just for a while that we still have to deal with those cases where an allegedly injured worker was taking advantage of the gig economy to make money while not working for the defendant, how do we calculate average weekly wages?

Let’s take this hypothetical: Worker sustains an admitted injury (specific) while working for his employer. The treatment leads to surgery, and applicant is taken completely off work.

Calculating the average weekly wages for the employer is easy enough, but what do you do when the worker also demands his Uber earnings?

This came up once in my practice (until State Bar of California comes to its senses, I’m allowed to practice law and stuff, right?), with applicant claiming his average weekly wage should reflect all his deposits from his gig economy shift.

But that’s not really how this works, right? After all, if applicant was selling used cars for $10k each, but each car cost him $7k to buy for re-ale, he would be earning only $3k per car, not $10k per car (along with whatever other expenses he had).

On the other hand, applicant has expenses associated with his day job as well: laundry costs related to clothing, transportation costs for the commute, possibly licensing costs associated with doing his job. So what’s the proper measure?

The Court of Appeal considered a similar issue back in 1995, and no, this was not an Uber or Lyft case. In the matter of Hupp v. WCAB, the Court of Appeal held that when the injured worker engages in self-employed activity, it is the net, not the gross, income that is contemplated in calculating supplemental income.

More recently, the appeals board held in Mack v. Atlas Van Lines that in calculating average weekly wages, it is also the net and not the gross earnings that count.

But what deductions can you take to reduce the income? Well, that depends on the nature of the job. Odds are that the estimates are going to be rough. Auto insurance, gas, cleaning costs on the car, and any permits or license fees may be considered.

What do you think? Have you encountered injured workers claiming lost gig-economy income as part of their average weekly wages?

Gregory Grinberg is a workers' compensation defense attorney at the Law Office of Gregory Grinberg, based in the San Francisco Bay Area. This post is reprinted with permission from Grinberg's WCDefenseCA blog.