In the recent case of Hever Rivera Flores v. L.A. Specialty Food Produce Company, Inc., the Workers’ Compensation Appeals Board (WCAB) made a pivotal ruling that underscores the complexity of calculating Average Weekly Earnings (AWE) during extraordinary times, such as the COVID-19 pandemic.
Background The applicant, an employee of L.A. Specialty Food Produce Company, Inc., sustained a shoulder injury in August 2021 while working as an order puller. The primary issue at trial was determining the applicant’s AWE, which would, in turn, influence the amount of temporary disability benefits to be awarded. Initially, the Workers’ Compensation Judge (WCJ) calculated the applicant’s AWE based on his earnings during the 12 months preceding the injury—resulting in an AWE of $749.42.
However, this calculation failed to consider the severe impact that the COVID-19 pandemic had on the applicant’s working hours and overall earnings. Before the pandemic, the applicant frequently worked 11 to 12 hours per day, but these hours were drastically reduced due to the economic downturn and decreased demand for the employer’s products. As a result, the applicant’s earnings in the year before the injury were significantly lower than in prior years.
The Decision The applicant filed a Petition for Reconsideration, arguing that his AWE should be calculated based on his pre-pandemic earnings, which more accurately reflected his true earning capacity. The WCAB agreed with this argument, recognizing that the pandemic created “extraordinary and unusual circumstances” that distorted the applicant’s earnings in the year before his injury.
Citing the California Supreme Court’s decision in Goytia v. Workmen’s Comp. Appeals Bd., the WCAB concluded that in cases where an employee’s wages at the time of injury do not fairly reflect their earning capacity, alternative methods of calculating AWE should be used. In this case, the WCAB determined that the applicant’s 2019 earnings—prior to the pandemic—provided the most accurate representation of his true earning capacity.
As a result, the WCAB recalculated the applicant’s AWE to $1,301.46 per week, based on his 2019 earnings. This adjustment significantly increased the applicant’s temporary total disability rate, and the WCAB also nullified a previous finding that the applicant had been overpaid in temporary disability benefits.
Implications This decision highlights the importance of considering the broader economic context when determining workers’ compensation benefits, especially during unprecedented events like the COVID-19 pandemic. It sets a crucial precedent for other workers whose earnings may have been similarly impacted by external factors beyond their control.
For employers and employees alike, this case underscores the need for a fair and comprehensive assessment of earning capacity in the workers’ compensation process. It also serves as a reminder that the legal system must adapt to the realities of extraordinary circumstances to ensure that justice is served.
Conclusion The WCAB’s ruling in Hever Rivera Flores v. L.A. Specialty Food Produce Company, Inc. is a landmark decision in the realm of workers’ compensation law, recognizing that traditional methods of calculating AWE may not always be fair or reasonable during times of significant economic disruption. By considering the true earning capacity of workers affected by the pandemic, the Board has paved the way for more equitable outcomes in workers’ compensation cases.
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