Doud: Seasonal Employee Earnings Don't Have to Be Complicated

Wednesday, August 2, 2023 | 0

When calculating seasonal employees’ average weekly wages and entitlement to temporary total disability, parties must take the workers’ in-season and off-season wages into consideration, according to case law on the topic.

John W. Doud

Seasonal work is temporary employment that recurs around the same time every year. For example, businesses that primarily have more customers during specific seasons hire seasonal employees for extra help during their busiest times (e.g., agricultural workers or ski resort employees).

But can a seasonal employee be compensated by workers’ compensation temporary total disability benefits? What if the seasonal employee’s average weekly wage is different from full-time workers who are not considered seasonal employees?

The answer is yes, but as noted by our friends at CEB, an injured seasonal employee is entitled only to temporary disability benefits based on earnings at the time of injury for the period that the work would have continued. After the seasonal work has ended, the temporary disability rate is calculated by analyzing the seasonal employee’s earning history and anticipated future earnings had he or she not been injured.

In the en banc decision of Jimenez v. San Joaquin Valley Labor, the Workers' Compensation Appeals Board held that a seasonal employee’s average weekly wage should factor in two earning capacities. First, the employee’s in-season earning capacity should be analyzed. Second, the applicant’s off-season earning capacity should be looked at.

The 5th District Court of Appeal added to the seasonal worker doctrine in Signature Fruit Co. v. WCAB (Ochoa). In that case, the court determined that if a seasonal employee has no earnings during the off-season, his AWW will be zero for that period. This results in no temporary disability benefits during the off-season, because temporary disability benefits are calculated at two-thirds of the injured worker’s AWW.

The appellate court reasoned that temporary disability benefits are designed to replace lost wages during the period of recovery from an industrial injury. If a seasonal employee would not have any lost wages during the off-season, payment of temporary disability benefits during that period would result in a windfall. That would create an economic incentive for employees to exaggerate their level of disability and encourage them to malinger on temporary disability.

The Signature Fruit case focused on a situation in which a seasonal employee had no off-season earnings. By contrast, the Court of Appeal in Gerawan Farming Inc. v WCAB (Mendez) reasoned that an employee who presents substantial evidence that he or she intended to remain in the labor market during the off-season may be entitled to temporary disability benefits during that period.

How to calculate AWW

To calculate the applicant’s average weekly wage, you’ll need the employer’s wage statement with the total amount the applicant earned in the year prior to the date of injury.

Take the total earnings and divide them by the number of weeks or days during the employment leading up to the date of injury. In a scenario in which the applicant is a long-term employee and the prior 52 weeks are an accurate reflection of the earnings, the calculation is made by taking the total and dividing it by 52.

If the employment was not a full 52 weeks, merely take the total number of weeks and calculate the total earnings during that specific period of time. Next, divide the total gross earnings by the number of weeks in which the applicant worked. This will provide the average weekly wage as long as the total earnings are correct and the number of weeks or days worked is accurate.

Beware of artificially reduced earnings

Regardless of whether it’s a seasonal or year-round employee, sometimes workers will have reduced earnings due to personal sickness, such as a cold, or maybe taking care of a sick relative. To avoid difficulties with the Audit Unit, you may want to remove those weeks from your calculations.

One way to think of those weeks with artificially reduced earnings is as weeks where the employee, through no fault of his own, didn’t meet his earning capacity or the employer’s promise of payment. Removal of those weeks from your wage calculation may result in a slightly higher AWW, but you will be happy that you did when you pass your upcoming audit with flying colors.

Conclusion

Calculating average weekly wages for seasonal employees can seem daunting but can be simplified by breaking down the seasonal and off-season earnings.

John W. Doud is an associate attorney at Bradford & Barthel’s Woodland Hills office. This entry from Bradford & Barthel's blog appears with permission.