Illinois: Mandatory Overtime Included in Average Weekly Wage

Illinois: Mandatory Overtime Included in Average Weekly Wage

The 18 year battle over including or excluding overtime in calculation of the average weekly wage continues to rage.  All Illinois benefits are derived from the workers "average weekly wage" in the 52 weeks preceding the accident.  Accordingly, weekly earnings or weekly wages have been hotly contested as an area of dispute.  Average weekly wages are used to calculate both temporary disability benefits and permanent disability benefits.   Section 10 of the Illinois Workers Compensation Act clearly and specifically excludes overtime earnings in calculation of average weekly wage.

However, since 1990, in Edward Hines Lumber, mandatory overtime hours have been included where they form the "regular hours" of employment.  There the worker for Hines Lumber was regularly required to work mandatory 10 hour days for 6 days a week as a condition of his regular employment.  Since the overtime hours were mandatory and they were required as part of the "regular employment", the regular earnings included the overtime hours included in the calculation of average weekly wages at the straight time rate of pay.

After the Hines case, the Illinois Commission continued to exclude overtime earnings if either not regularly worked or if not mandatory.  The Commission's definition of "regularly worked" generally included overtime hours at straight time rate of pay if the worker "regularly worked" overtime in more than 50% of the 52 weeks preceding accident or where the overtime was mandatory.  The Illinois Courts also consistently excluded overtime hours that were not mandatory as a condition of employment or which were not part of a set number of hours or regularly worked each week as part of the regular employment.  see Edward Don (2003) and Freesen (2004).

Last year in Airborne Express (March 07), the Appellate Court said that voluntary overtime is excluded. The Appellate Court said that merely working voluntary overtime on a regular but voluntary basis, is definitely excluded in calculation of average weekly wage otherwise, the overtime exclusion in Section 10 of the Act would be completely meaningless. Some have argued that under Airborne the overtime must be excluded unless it is both mandatory and consistently regularly worked but that does not appear to comport with prior case law under Don and Freesen or prior Commission decisions.

Shortly after the Airborne decision, the Commission decided Terrell v Jacksonville (07 IWCC 1319, October 2007) where the Commission said that to include the overtime hours, the worker must show that the overtime was either regular and consistent or mandatory.  In Terrell, a mental health technician was required to work overtime because the facility was short staffed and the employer did not deny the overtime was mandatory.  The Commission included the overtime.   In Lockhart v Dominick's (08 IWCC 318, March 2008) a delivery driver testified that he was required to finish deliveries and some of his overtime hours were in fact mandatory but he failed to prove the exact amount of the mandatory overtime hours so the overtime hours were excluded.  In Heffner v Little Lady (08 IWCC 510, May 2008) the Commission also denied the inclusion of overtime hours for a maintenance supervisor where the overtime hours were not shown to be mandatory or part of the regular hours of employment.

In a reading of the case law, it looks like the definition for exclusion of overtime hours under Section 10 is more easily defined than considering all the situations where overtime hours might or should be included in calculation of wages. The Court in Airborne clearly said that they have consistently held the Section 10 exclusion in calculation of wages excludes overtime hours where the worker is not required to work the overtime as a condition of employment (i.e. mandatory) or excludes overtime hours which are not part of a set number of hours consistently worked each week.

The nuance in terms in overtime wages is often misunderstood.  Workers and employers should both be concerned with proper calculation of average weekly wage and they should both be encouraged to contact an experienced Chicago workers compensation attorney for consultation given that a fairly large amount of money can be involved in calculation of temporary disability benefits or permanent partial disability benefits.  Especially large amounts of money can be involved in long term weekly payments of wage differential benefits and in claims for permanent and total disability, both of which can last for the full lifetime of the worker.

 © Copyright 2008 by Brad Bleakney. All rights reserved. Reprinted by permission. This blog originally appeared on Illinois Workers Compensation Blog, published by Brad Bleakney, Bleakney & Troiani, Work Comp Chicago, LLC.