A recent workers’ compensation case centered on how to calculate a business owner’s wage rate. The outcome made it very clear that the Labor and Industrial Relations Commission (LIRC) wields great power in these cases.
Repair Shop Owner Dies on the Job
The case was Williams v. Reeds, LLC.
Reeds, LLC was an auto parts and repair shop. The sole member of the LLC and the owner of the shop died in December, 2015, when a truck bed fell on him.
The victim’s wife, as well as two children from a prior marriage, filed a workers’ compensation claim for survivor benefits. In addition to funeral expenses, the amount of these survivor benefits is set out in Missouri Statute 287.240(2). Currently, they are two-thirds of the victim’s average weekly earnings in the last year, subject to a maximum amount.
Calculating Weekly Wage Rate in Exceptional Cases
Because the victim’s average weekly wage is the basis for the survivor’s benefits, calculating the victim’s wage rate is crucial. Generally, the calculation methods in Missouri Statute 287.250 suffice.
However, the victim in this case was the business owner, not an employee. Worse, he reported to his workers’ compensation insurer that he received no wages, even though he was paying himself $600 or more every week, alongside his other employees. He also used the business checking account to pay for nearly all of his personal expenses, like groceries, and claimed that these were business expenses on his tax returns.
These significant complications trigger Missouri Statute 287.250(4), which lets the LIRC use whatever method they want to fairly determine the worker’s average weekly wage. In many cases, the LIRC turns to expert witnesses.
LIRC Has Broad Discretion in Weighing Expert Testimony
In Williams, two expert witnesses looked through the victim’s finances to determine his average weekly wage. The workers’ compensation insurer provided a certified public accountant (CPA) with designations in business valuation and financial forensics. The plaintiffs claiming survivor benefits provided a family law attorney who had experience breaking down incomes for things like child support, but not for workers’ compensation.
The LIRC sided with the findings of the family lawyer over the CPA and awarded the victim’s family their survivor benefits accordingly.
When the insurer appealed, the Missouri Court of Appeals shrugged. The only way that the court would overturn the LIRC’s determination that one expert’s testimony was more compelling than another’s was if it was an abuse of the LIRC’s discretion.
Workers’ Compensation Lawyers at the Smith Law Office
In this case, the LIRC’s decision to side with the plaintiffs’ family law attorney over the insurer’s CPA helped the victim’s family recover more in survivor benefits. However, the wide latitude that the appellate court gave the LIRC is an open door to be exploited by business interests. Given the LIRC’s long history of favoring businesses over the victims of workplace injuries, one would expect the Commission to use this discretion to find certain experts more credible, simply because they were provided by insurers, rather than by victims.
If you or a loved one has been hurt in a workplace accident in St. Joseph, Kansas City, Springfield, or the rest of western Missouri, the personal injury and workers’ compensation lawyers at the Smith Law Office can help. Contact them online or call their law office at (816) 875-9373.