Louisiana Fifth Circuit Splits From Second And Third Circuits On Workers’ Compensation Average Weekly Wage

In Louisiana workers’ compensation cases, the average weekly wage for a full-time employee paid hourly wages is determined by La. R.S. 23:1021(13)(a)(i). Under that statute, an employee’s average weekly wage is his hourly wage rate multiplied by the average actual hours worked in the four full weeks preceding the date of the accident or forty hours, whichever is greater.

In situations where an employee does not have a four-week work history, yet may have worked overtime during their limited period of employment, the Second and Third Circuit Courts of Appeal have interpreted workers’ compensation statutes liberally to allow the employee maximum benefits[1]. Instead of strictly applying 23:1021(13)(a)(i), these Courts have determined that the proper calculation is to divide the actual hours worked or the wages received only by the number of weeks actually worked by the employee prior to the injury.

In the recent case of Juarez v. Aj Lazo Constr.[2], the Fifth Circuit has declined to follow the Second and Third Circuits and held that La. R.S. 23:1021(13)(a)(i) is clear and unambiguous and must be applied as written.

The Circumstances and Rulings in Juarez

The claimant in Juarez was a painter/drywall finisher for an uninsured subcontractor who had only worked for two weeks at the time he was injured on July 7, 2020. Mr. Juarez testified that he was paid $18.00 per hour. He did not have pay stubs, but was able to produce two checks reflecting wages of $954.00 and $1,260.00.

Lazo Construction assumed the workers’ compensation obligation for Mr. Juarez and began paying him weekly temporary total disability benefits based on an average weekly wage of $720.00, applying the forty-hour presumption. Mr. Juarez contended that Lazo Construction erred in their calculation and argued that his average weekly wage should have been $1,107.00 – the average of the two paychecks he received. The matter was brought to trial before the workers’ compensation judge, who ruled in favor of Mr. Juarez. In her written reasons for judgment, the workers’ compensation judge cited the cases out of the Second and Third Circuits in support of her finding. Penalties and attorney’s fees were awarded.

On Appeal, the Fifth Circuit concluded that the workers’ compensation court erred as a matter of law in calculating Mr. Juarez’s average weekly wage by failing to apply the forty-hour presumption. The Court noted that the cases out of the Second and Third Circuit predated the enactment of La. R.S. 23:1020.1(D)(2) in 2012, which provides that laws pertaining to workers’ compensation shall not be broadly and liberally construed in favor of either an employer or employee and, in fact, “shall be construed in accordance with the basic principles of statutory construction”.

La. R.S. 23:1020.1(D)(3) further instructs that the liberalization or broadening of workers’ compensation statutes shall be the exclusive purview of the legislature. With that in consideration, the Court held that the plain language of the average weekly wage statute was clear and unambiguous and must be applied as written. Because it was possible to apply La. R.S. 23:1021(13)(a)(i) to Mr. Juarez’s claim, it was neither necessary nor appropriate to resort to outside jurisprudence to determine his average weekly wage.

Finally, in addressing whether a strict application of 23:1021(13)(a)(i) was fair, the Court opined that Mr. Juarez was receiving much more in workers’ compensation benefits than he had reported in actual wages on his tax returns and that he was not deprived of benefits by applying the statute as written.

Significance of Juarez

Certainly, this is a win for Employers and Carriers who have seen little change in the tendency of workers’ compensation judges to apply the statutes broadly in favor of employees on numerous issues, despite the legislative changes that were enacted more than 10 years ago. At the same time, this particular strict application seems unfair to injured employees who may have been very productive during a limited period of employment. It will be interesting to see whether this issue makes its way up to the Supreme Court to resolve the dispute between the Circuits or whether the legislature will make any efforts to rewrite La. R.S. 23:1021(13)(a)(i).

[1] See Fusilier v. Slick Construction Company, 94-11 (La. App. 3 Cir. 6/1/94), 640 So.2d 788 and Upchurch v. Randall Well Service, 45,056 (La. App. 2 Cir. 4/14/10), 34 So.3d 500.

[2] Juarez v. Aj Lazo Constr., 22-575 (La. App. 5 Cir. 9/20/23), 370 So.3d 1280.