Reduction in overtime counts in benefits calculation

n Maryland, the term "wage-earning capacity" includes the capacity of a worker to earn overtime compensation.

Case name: Montgomery County v. Deibler, No. 120, September Term, 2010 (Md. 10/27/11).

Ruling: The Maryland Court of Appeals held that a firefighter was entitled to compensation for the loss of income he experienced due to a reduction in overtime compensation.

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What it means: In Maryland, the term "wage-earning capacity" includes the capacity of a worker to earn overtime compensation.

Summary: A firefighter for a county sustained two work-related injuries to his knee. The injuries forced him from his regular duties to a reduced light-duty role. His hours were reduced, but his salary remained the same. However, he also experienced a reduction in his overtime hours of 10 hours per week and overtime compensation of $30,000. The firefighter did not receive special approval from a supervisor to work overtime hours. His income dropped significantly. The firefighter sought disability compensation for the loss of income stemming from each injury. The Maryland Court of Appeals held that the term "wage-earning capacity" includes the capacity to earn overtime compensation.

The court explained that the term "wage-earning capacity" was ambiguous. Although the county asserted that the ability to earn overtime was separate from the ability to work, the court found that overtime pay fell within the definition of wages. The court said that the broad definition of "wage" strongly suggested that the legislature intended "wage" to include overtime compensation. It would follow that when a worker is restricted by disability from performing overtime labor and earning overtime compensation, the worker is restricted from earning a wage. The worker's wage-earning capacity would be decreased.

The court also considered statutory definitions of "wage" that mandated that wage meant "all compensation" or "all earnings." The court determined that this also supports its decision that overtime compensation was included in the definition of "wage" and "wage-earning capacity." Therefore, the firefighter was entitled to compensation for the loss of overtime hours.

Read more at the WorkersComp Forum homepage.

December 8, 2011

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