Ohio Court Says Healthcare Benefits and Pension Contributions Not to be Used in Computing AWW
Quoting Larson’s Workers’ Compensation Law, an Ohio appellate court affirmed a decision by the state’s Industrial Commission that had refused to consider various fringe benefits in the form of health and welfare benefits, as well as the employer’s contribution to several pension funds as “wages” or “earnings” under Ohio Rev. Code 4123.61, and therefore should not be considered in computing the injured worker’s average weekly wage [State ex rel. Matheny v. Industrial Comm’n of Ohio, 2022-Ohio-1824, 2022 Ohio App. LEXIS 1697 (May 31, 2022)].
Background
The claimant requested that his average weekly wage be adjusted to include not only his hourly compensation of $36.78, plus health and welfare benefits at a rate of $8.80 per hour, plus various pension benefits that when totaled would have adjusted his AWW upward from $999.80 to $1,545.10. A district hearing officer (“DHO”) denied the claimant’s request, finding that such benefits were not wages for the purposes of calculating AWW pursuant to Ohio Rev. Code 4123.61.
The staff hearing officer affirmed the DHO’s order and the Commission refused further appeal in the case. Upon further appeal, the matter was referred to a magistrate, who concluded that the Commission did not abuse its discretion when it entered an order finding that the additional benefits cited by the claimant were not wages. The claimant filed a timely objection and the matter moved to the District Court of Appeals.
Court of Appeals Decision
Initially, the Court noted that Ohio Rev. Code 4123.61 required the AWW to be based on the injured worker’s “wages” or “earnings,” yet did not define either term. The Court noted also that the United States Supreme Court delved into what was commonly referred to as fringe benefits in Morrison-Knudsen Constr. Co. v. Dir., Office of Workers’ Comp. Program, 461 U.S. 624, 103 S. Ct. 2045, 76 L. Ed. 2d 194 (1983). In that case, the Supreme Court held that an employer’s contributions to a union trust fund for health and welfare, pensions, and employee training were not considered wages for the purposes of calculating weekly benefits under the District of Columbia’s Workers’ Compensation Act. In so deciding, the Supreme Court relied on the fact that the health and welfare, pension, and training funds could not be readily converted to a cash equivalent in the same way as regular wages or the reasonable value of lodging.
Quoting Larson’s Workers’ Compensation Law, § 93.01[2][b], the Ohio appellate court said the majority trend is to treat an employer’s matching contribution to a pension plan as a welfare benefit that falls under the category of “fringe benefits,” and thus is not included in the calculation of weekly benefits for workers’ compensation purposes.
The Court added that the Commission has the discretion under R.C. 4123.61 to include additional employer provided benefits as wages in the calculation of AWW, but it is not required to include the benefits offered by the claimant. Based on the foregoing, the Court said the magistrate had properly determined the facts and correctly applied the relevant law. Adopting the magistrate’s decision as its own (as supplemented by the lead and separate concurring opinions, the Court overruled the claimant’s objection, and denied the request writ of mandamus.