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With good cause, an IE or an IC may dispute the order regarding a change to an alternate treating doctor within 10 days after receiving the order. The dispute will be handled through the dispute resolution process described in 28 Texas Administrative Code (TAC) Chapters 140 - 143. 28 TAC Section 126.9(g).

Although filing a DWC Form-045 (Request to Schedule, Reschedule, or Cancel a Benefit Review Conference (BRC) or to Proceed Directly to Contested Case Hearing (CCH)) to request a BRC is the preferred way to dispute a DWC order regarding a change of treating doctors, that is not the only way such a dispute may be made. The AP has held that an IC disputing a change of treating doctor in a TWCC Form-021 (now PLN-11, Notice of Disputed Issue(s) and Refusal to Pay Benefits) filed within the 10-day period to timely contest the approval or denial of a request to change treating doctors is an adequate dispute. APD 000620.

Party Did Not Waive Right To Dispute Division Order Regarding Change In Treating Doctor. 

The IC filed a TWCC Form-021 (now PLN-11, Notice of Disputed Issue(s) and Refusal to Pay Benefits) disputing the change of treating doctors on March 27, 2001. The IC filed a TWCC Form-045 (now DWC Form-045, Request to Schedule, Reschedule, or Cancel a BRC or to Proceed Directly to CCH) that only disputed entitlement to TIBs on April 2, 2001. The ALJ determined that the IC did not waive the right to dispute the change of treating doctors under 28 TAC Section 126.9(g). As the IC filed its dispute within 10 days after receiving the order approving the IE's request to change treating doctors, the AP affirmed the ALJ's determination.  APD 011513.

Party Waived Right To Dispute Division Order Regarding Change In Treating Doctor. 

The order approving the IE's change in treating doctors was placed in the IC representative's box on September 5, 2002. The IC did not dispute the order until September 20, 2002, more than 10 days after the IC received the order. The ALJ determined that the IC waived its right to dispute the order. The AP affirmed the ALJ's determination.  APD 030567.

An IE may request reimbursement from an IC for travel expenses incurred for medical treatment for the IE's compensable injury when:

  1. medical treatment for the compensable injury is not reasonably available within 30 miles from where the IW lives; and
  2. the distance traveled to secure medical treatment is greater than 30 miles one-way.

28 TAC Section 134.110(a).

The IE must submit a DWC Form-048, Request for Travel Reimbursement to the IC within one year of the date the expenses were incurred. 28 TAC Section 134.110(b). The request must include documentation or evidence (such as itemized receipts) of the amount of the expense. 28 TAC Section 134.110(c). Reimbursement is based on the travel rate for state employees on the date of travel. 28 TAC Section 134.110(d). See 28 TAC Section 134.110(d) for the methods used in measuring travel mileage. When an IE's travel expenses reasonably include food and lodging, the IC reimburses actual expenses not to exceed the current rate for state employees on the date the expense is incurred. 28 TAC Section 134.110(d). Reimbursement for travel expenses, including food and lodging, is only available to the IE. APD 060440-s (please note that although this APD was decided under prior Section 134.6, concerning dates of travel prior to May 2, 2006, which is the effective date of 28 TAC Section 134.110, the new section on travel reimbursement also does not provide for reimbursement of travel expenses for anyone other than the IE).

"Accrual date" means the day an IE's income benefits begin to accrue. 28 TAC Section 124.7(a). Income benefits do not begin to accrue until the eighth day of disability. 28 TAC Section 124.7(b); APD 032435. [Cross-reference: Existence/Duration of Disability Raised by Other Evidence (I03)]. Income benefits may not be paid for an injury that does not result in disability for at least one week. TLC Section 408.082(a). If the IE has not sustained disability for at least one week, there is no accrual date for TIBs. APD 200483.

If the disability continues for longer than one week, weekly income benefits begin to accrue on the eighth day after the date of the injury. If the disability does not begin at once after the injury occurs or within eight days of the occurrence but does result subsequently, weekly income benefits accrue on the eighth day after the date on which the disability began. TLC Section 408.082(b). For dates of injury occurring before September 1, 2005, if the disability continues for four weeks or longer from the date the disability began, the income benefits shall be computed from the date disability began. For dates of injury occurring on or after September 1, 2005, if the disability continues for two weeks or longer after the date the disability begins, the income benefits shall be computed from the date the disability begins. TLC Section 408.082(c).

TLC Section 408.082(b) and (c) make it clear that accrual of income benefits payable for disability begins "after the date of injury." APD 180300. In that case, the AP affirmed as reformed the decision of an ALJ finding that the IE had disability beginning on a date preceding the date of injury, noting that accrual of income benefits did not begin until after the date of injury.

To be eligible for benefits under the Act, the IE must have been an employee of an employer that carries workers' compensation insurance coverage at the time the work-related injury occurred. Section 406.031. [Cross reference. Course and Scope of Employment (C00)]. A dispute about an IE's employment status is one of compensability and is subject to judicial review under TLC Section 410.301(a). Morales v. Liberty Mut. Ins. Co., 241 S.W.3d 514 (Tex. 2007). An employee is a person in the service of another under a contract of hire, whether expressed or implied, or oral or written. TLC Section 401.012(a). An employer is a person who makes a contract of hire, employs one or more employees, and has workers' compensation insurance coverage. The term includes a governmental entity that self-insures, either individually or collectively. TLC Section 401.011(18). The IE has the burden of proof to establish that he or she was an employee of the employer for purposes of the Texas Workers' Compensation Act at the time the injury occurred. APD 000538.

Independent Contractors.

In general, an independent contractor is not an employee for purposes of the Texas Workers' Compensation Act. TLC Section 401.012(b)(2). Whether an IE is an employee or independent contractor is a question of fact for the ALJ to resolve, and is determined in part by considering right to control. APD 032530. It must be determined whether the claimed employer has the right to control the IE in the details of the work to be performed. Texas Employers Insurance Association v. Bewley, 560 S.W.2d 147 (Tex. Civ. App.-Houston [1 st Dist.] 1977, no writ); APD 93110. Right of control is a factual question for the ALJ to resolve. APD 92039. In addition to right of control, TLC Section 406.121(2) sets out the factors to be considered when determining an IE's employment status. Each factor in TLC Section 406.121(2) need not be established in order to find that an IE is an independent contractor. APD 93110.

Multiple Employers.

An IE can have more than one employer for the same injury for purposes of the Texas Workers' Compensation Act. In Wingfoot Enterprises D/B/A Tandem Staffing v. Alvarado, 111 S.W.3d 134 (Tex. 2003), the Supreme Court held that an IE could have more than one employer where a temporary agency furnished a worker to a client that controlled the details of the work at the time of the injury and where there was no written agreement between the temporary agency and the client as to workers' compensation coverage.

Borrowed Servant.

Texas courts have recognized that a general employee of one employer may become the borrowed employee of another employer. APD 021771. The determinative question is which employer had the right of control of the details and manner in which the employee performed the necessary services at the time of the injury. Carr v. Carroll Co., 646 S.W.2d 561 (Tex. App.-Dallas 1982, writ ref'd n.r.e.) In Richmond v. L.D. Brinkman & Co. (Texas) Inc., 36 S.W.3d 903 (Tex. App.-Dallas 2001, pet. denied), the court determined that the common law borrowed servant right-of-control test is not superseded by Texas Labor Code Chapter 92 entitled Temporary Common Worker Employers. However, the Staff Services Leasing Act (now known as the Professional Employer Organizations Act), Texas Labor Code Chapter 91, does supersede the common law borrowed servant right-of-control test in determining employer status of leased employees for workers' compensation purposes. Texas Workers' Compensation Ins. Fund v. DEL Industrial, Inc., 35 S.W.3d 591 (Tex. 2000); APD 021771. See also APD 101718.

[Cross-references:Reduction/Suspension (IIBs or SIBs) for Contribution from Prior Compensable Injury (I15);Wage Issues (W00-W06)].

Statutory and Rule Provisions

Texas Labor Code (TLC) Section 408.0815, enacted as part of House Bill 2089, 82nd Texas Legislature Regular Session (2011), required the commissioner of workers’ compensation to establish by rule a procedure through which an IC could recoup underpayments and overpayments of workers’ compensation income benefits. Before this legislative change, without a specific statutory or rule provision an IC could not recoup the overpayment of income benefits from an IE’s future benefits. APD 060318. An exception was when the overpayment was due to a miscalculation of the IE’s AWW.

Concerning overpayments, the procedure under TLC Section 408.0815(a)(1) would allow an IC to recoup an overpayment of income benefits from future income benefit payments that are not reimbursable under TLC Section 410.209 (relating to overpayments of benefits eligible for reimbursement by the Subsequent Injury Fund (SIF)).

The procedure for IC recoupment of overpayments of income benefits had to include a process by which an IC must notify an IE of:

• an overpayment of income benefits;

• the time frame and methodology by which an IC could recoup an overpayment through the reduction of a future income benefit payment; and

• a method for coordinating overpayments that may be recouped from future income benefits and reimbursements described by TLC Section 410.209.

TLC Section 408.0815(b)(3)-(5).

Under TLC Section 408.0815(c), the procedure for recouping overpayments under Subsection (a)(1) must take into consideration the cause of the overpayment and minimize the financial hardship to the IE.

Effective on January 1, 2012, 28 Texas Administrative Code (TAC) Section 126.16 (titled “Procedures for Recouping Overpayments of Income Benefits”) implemented TLC Section 408.0815. That rule applies only to IC overpayment of income benefits. The rule does not apply to:

1) IC overpayment of death, burial, or medical benefits;

2) redesignation of income benefits; or

3) repayments pursuant to TLC Section 415.008 (titled Fraudulently Obtaining or Denying Benefits; Administrative Violation). 28 TAC Section 126.16(a).

Under 28 TAC Section 126.16(b), if an IC determines that it has overpaid income benefits to an IE, the IC may recoup the overpayment from future income benefit payments as follows:

1) The IC must notify the IE in writing that it will begin withholding benefits to recoup an overpayment. The notice must be in plain language and in English or Spanish, as appropriate. The notice must also include the reason for the overpayment; the amount of the overpayment to be recouped from future income benefit payments; the date recoupment will begin; and relevant documentation that supports the IC’s determination of an overpayment, such as a wage statement or a supplemental report of injury. The notice must also advise the IE that if the IE disagrees that there has been an overpayment, the IE may request dispute resolution through the dispute resolution processes outlined in Chapters 140 - 144 and 147 of this title (relating to Dispute Resolution), including expedited dispute resolution. The IC may not begin recoupment of the overpayment earlier than the second income benefit payment made after the written notice has been sent to the IE.

2) If the IE’s income benefits are not concurrently being reduced to pay approved attorney's fees or to recoup a DWC approved advance, the IC may recoup the overpayment under this subsection in an amount not to exceed 25% of the income benefit payment to which the IE is entitled, except as provided by subsection (c) of this section.

3) If the IE’s income benefits are concurrently being reduced to pay approved attorney's fees or to recoup a division approved advance, the IC may recoup the overpayment under this subsection in an amount not to exceed 10% of the income benefit payment to which the IE is entitled, except as provided by subsection (c) of this section.

28 TAC Section 126.16(c) provides that, if the IC wishes to recoup the overpayment in an amount greater than that permitted by subsection (b) of this section, the IC must attempt to enter into a written agreement with the IE and, if unable to do so, request dispute resolution through the dispute resolution processes outlined in Chapters 140 - 144 and 147 of this title. If the IE wishes to provide for recoupment of the overpayment in an amount less than the percentage chosen by the IC, the IE must attempt to enter into a written agreement with the IC and, if unable to do so, request dispute resolution through the dispute resolution processes outlined in Chapters 140 - 144 and 147 of this title.

In determining whether to approve an increase or decrease in the recoupment rate, DWC must consider the cause of the overpayment and minimize the financial hardship that may reasonably be created for the IE. 28 TAC Section 126.16(d).

Under 28 TAC Section 126.16(e), the IC must provide notice to the IE and DWC of any change in the payment of an IE’s income benefits in accordance with the requirements of 28 TAC Section 124.2 of this title (relating to Carrier Reporting and Notification Requirements). The IC’s notice to the IE must identify the amount that was overpaid.

The rule does not create an entitlement for an IC to seek reimbursement from the SIF except as provided by TLC Sections 403.006 (relating to SIF), 408.0041 (relating to Designated Doctor Examination), 410.209 (relating to overpayments of benefits eligible for reimbursement by the SIF), and applicable DWC rules. 28 TAC Section 126.16(f).

Under 28 TAC Section 126.16(g), if an IE does not agree that he or she has received an overpayment of income benefits, the IE may request dispute resolution through the dispute resolution processes outlined in Chapters 140 - 144 and 147 of this title, including expedited dispute resolution.

The rule does not affect DWC’s authority to identify and take action on overpayments on its own motion. 28 TAC Section 126.16(h).

The enactment of TLC Section 408.0815 also prompted changes to 28 TAC Section 128.1 (dealing with AWW), to remove language limiting recoupment to a miscalculation of the IE’s AWW.

Income Benefits vs. Medical Benefits.

As noted above, ICs can only recoup overpayments of income benefits, not medical benefits. Income benefits and medical benefits are of a different kind and character, and one may not be reached to satisfy an overpayment of the other no matter the reason for the overpayment. APD 002508-s. Travel reimbursement for medical care is a medical benefit. APD 022547. See 28 TAC Section 134.110 on reimbursement for travel expenses for medical treatment. [Cross-reference: Reimbursement for Medical Travel Expenses (M02)]

AWW and Recoupment.

The ALJ found that the IC was entitled to reduce the IE’s IIBs to recoup a previous overpayment of $2,699.48. The overpaid amount was based on a Notice of Disputed Issue(s) and Refusal to Pay Benefits (PLN-11) from November 2012 stating that the IE was paid $18,320.69 in benefits but was only entitled to $15,621.21. The IC had initially paid benefits based on a reasonable assessment of the AWW, but, after it received a DWC Form-003, Employer’s Wage Statement, the AWW was recalculated at a lower amount. The parties later agreed to an AWW of $735.86 as part of a DWC Form-024, Benefit Dispute Agreement, in November 2013. The AP reversed and remanded the decision of the ALJ because the amounts found in the PLN-11 were not based on the AWW agreed to by the parties in the later DWC Form-024 and the ALJ did not consider the parties’ agreement in determining the recoupment issue. The AP directed the ALJ to make a finding of the AWW that should be used to decide the IC’s overpayment, if any, and identify the calculations and relevant time periods used to arrive at the amount determined to be overpaid, if any. APD 140981.

Line of Duty Pay.

In City of San Antonio v. Vakey the Fourth Court of Appeals noted that line of duty payments made under Local Government Code Section 143.073 are not considered salary supplements or salary continuation. It further noted that, while TLC Section 504.051 permits a city self-insured to offset the amounts paid for TIBs by the amounts paid for line of duty pay, it is the amount paid under Local Government Code Section 143.073 that is reduced, not the workers' compensation benefits. City of San Antonio v. Vakey, 123 S.W.3d 497 (Tex.App.-San Antonio 2003, no pet.).

Redesignation of Overpaid TIBS as IIBS.

TIBs continue until the IE reaches MMI, if the IE has disability, and an IE's entitlement to IIBs, as well as the IIBs accrual date, begins on the day after the IE reaches MMI. TLC Sections 408.101(a); 408.102(a); and 408.121(a); 28 TAC Section 130.8(a).

Where an IC has paid TIBs to an IE after what is later determined to be the MMI date, the TIBs payments made after the MMI date are redesignated as IIBs, and the IC can take credit as IIBs those income benefits it paid to the IE as TIBs after the MMI date. APD 94872. The redesignation of income benefits is different from recoupment, which allows for reduction or suspension of income benefits to offset a previous overpayment. APD 110692.

[Cross-references:Amount of AWW (W01);Multiple Employment Employee (W06)]

When an IE is employed by more than one employer on the DOI, the IC shall calculate the AWW for that IE using the wages from all of the employers. For this purpose, the IE is required to submit a Multiple Employment Wage Statement (DWC Form-003ME) to the IC. 28 TAC Section 128.1(h).

Claim Employers.

The claim employer is who the IE worked for at the time of the injury and with whom the IE filed a claim for workers' compensation benefits. 28 TAC Section 122.5(a)(1). The portion of the AWW based on employment with the claim employer shall be calculated according to how the IE's AWW would be determined if the IE did not have multiple employment. 28 TAC Section 128.1(h)(1).

Non-Claim Employers.

A non-claim employer is any employer, other than the claim employer, who employed the IE on the DOI. 28 TAC Section 122.5(a)(2). An IE employed by a non-claim employer, in addition to the claim employer, at the time of the injury is allowed an adjustment in income benefits based on this employment.

Under 28 TAC Section 122.5(d), the Multiple Employment Wage Statement shall include:

(1) the [IE’s] name, address, and social security number;

(2) the date of the [non-claim employer’s] hire of the employee;

(3) the [DOI];

(4) the [non-claim employer’s] name, address, and federal tax identification number;

(5) the name and phone number of a person at the [non-claim employer] who can be contacted to verify the wage information (unless the wage information was not provided by a person at the [non-claim employer] - such as if the wage information came from the Texas Workforce Commission or the employee's pay stubs);

(6) the wage information required by subsection (e) of this section with documentation that supports the wage information being reported; and

(7) a certification that the wage information provided includes all wage information required by subsection (e) of this section and that the information is complete and accurate.

Among other issues in the case, the ALJ decided that the IE was employed by a non-claim employer, but she was not entitled to increased income benefits under TLC Section 408.042 and 28 TAC Section 128.1(h). The ALJ’s decision on this issue was based on her statement that she could not determine when the IE filed the Multiple Employment Wage Statement with DWC and the IC. The AP found that the ALJ’s failure to consider the document under those circumstances was legal error, writing that the IE effectively submitted the document to the IC and DWC by the exchange of that document and its admission into evidence at the CCH. In addition, the AP pointed to APD 151496-s, in which it clarified that 28 TAC Section 122.5 does not establish a deadline for filing a Multiple Employment Wage Statement. The AP ultimately affirmed the ALJ’s decision that the IE was not entitled to increased income benefits under TLC Section 408.042 and 28 TAC Section 128.1(h), because the Multiple Employment Wage Statement did not contain all of the information required in 28 TAC Section 122.5(d), namely the non-claim employer’s address or federal tax identification number. APD 171228.

The portion of the IE's AWW that is based on employment with a non-claim employer shall be calculated by adding together the wages paid to the IE during the 13 weeks immediately preceding the injury and dividing that result by 13. If the IE has not worked for 13 weeks or more prior to the DOI, the wages used to determine the AWW are those paid by the employer to a similar employee, who performed similar services and earned wages during the previous 13 weeks. If there is no similar employee at the employer's business, the AWW is determined using the wages earned by a similar employee who performed similar services in the same vicinity. The wages paid to that person during the 13 weeks prior to the DOI are added together and divided by 13. 28 TAC 128.1(h)(2). Wages used to determine the AWW from a non-claim employer shall include only those wages reported for federal income tax purposes. TLC Section 408.042(e); 28 TAC Section 128.1(h)(2). The IE must have earned income from the non-claim employer during the 13 weeks prior to the DOI or there can be no adjustment to the AWW for multiple employment. APD 030164-s. The IE has the burden to establish the wages earned from the non-claim employer. APD 052864-s. A Multiple Employment Wage Statement may be filed after the date of MMI. APD 151496-s, referenced in the APD 171228 case summary above, clarifies that 28 TAC Section 122.5 does not establish a deadline for filing a Multiple Employment Wage Statement to the IC. 28 TAC Section 122.5(f) defines the time period, up to the date the IE reaches MMI, for which IEs filing Multiple Employment Wage Statements must report any change in employment status or wages to the IC.

Volunteer Firefighters.

The IE sustained a compensable injury while performing his duties as a volunteer firefighter. In addition to his work as a volunteer firefighter, the IE earned wages from two different employers. The ALJ calculated a wage for the IE as a volunteer firefighter and then combined that amount with the wages from the IE’s employment with the two non-claim employers to determine his AWW. The AP reversed and rendered, holding that, because the IE earned no wages as a volunteer firefighter, his AWW could only be based on his wages from the two non-claim employers. APD 050140.

Income benefits are calculated based upon the IW's AWW. The Division computes the State maximum and minimum income benefit amounts on an annual basis. See Sections 408.061 and 408.062. In general, income benefits have a maximum and minimum weekly amount. See Section 130.102(f) dealing with the calculation of SIBs. Note that it doesn't mention a minimum SIBs amount. See also 28 TAC Section 128.7 which deals with school district employees.

[Cross-reference: Amount of average weekly wage (W01)].

[Cross-references: Amount of AWW (W01); Entitlement to Multi-Employer Benefits (I25)]

When an IE is employed by more than one employer on the DOI, the IC shall calculate the AWW for that IE using the wages from all of the employers. For this purpose, the IE is required to submit a Multiple Employment Wage Statement (DWC Form-003ME) to the IC. 28 TAC Section 128.1(h).

Claim Employers. 

The claim employer is who the IE worked for at the time of the injury and with whom the IE filed a claim for workers' compensation benefits. 28 TAC Section 122.5(a)(1). The portion of the AWW based on employment with the claim employer shall be calculated according to how the IE’s AWW would be determined if the IE did not have multiple employment. 28 TAC Section 128.1(h)(1).

Non-Claim Employers. 

A non-claim employer is any employer, other than the claim employer, who employed the IE on the DOI. 28 TAC Section 122.5(a)(2). An IE employed by a non-claim employer, in addition to the claim employer, at the time of the injury is allowed an adjustment in income benefits based on this employment.

Under 28 TAC Section 122.5(d), the Multiple Employment Wage Statement shall include:

(1) the [IE’s] name, address, and social security number;

(2) the date of the [non-claim employer’s] hire of the employee;

(3) the [DOI];

(4) the [non-claim employer’s] name, address, and federal tax identification number;

(5) the name and phone number of a person at the [non-claim employer] who can be contacted to verify the wage information (unless the wage information was not provided by a person at the [non-claim employer] - such as if the wage information came from the Texas Workforce Commission or the employee's pay stubs);

(6) the wage information required by subsection (e) of this section with documentation that supports the wage information being reported; and

(7) a certification that the wage information provided includes all wage information required by subsection (e) of this section and that the information is complete and accurate.

Among other issues in the case, the ALJ decided that the IE was employed by a non-claim employer, but she was not entitled to increased income benefits under TLC Section 408.042 and 28 TAC Section 128.1(h). The ALJ’s decision on this issue was based on her statement that she could not determine when the IE filed the Multiple Employment Wage Statement with DWC and the IC. The AP found that the ALJ’s failure to consider the document under those circumstances was legal error, writing that the IE effectively submitted the document to the IC and DWC by the exchange of that document and its admission into evidence at the CCH. In addition, the AP pointed to APD 151496-s, in which it clarified that 28 TAC Section 122.5 does not establish a deadline for filing a Multiple Employment Wage Statement. The AP ultimately affirmed the ALJ’s decision that the IE was not entitled to increased income benefits under TLC Section 408.042 and 28 TAC Section 128.1(h), because the Multiple Employment Wage Statement did not contain all of the information required in 28 TAC Section 122.5(d), namely the non-claim employer’s address or federal tax identification number. APD 171228.

The portion of the IE’s AWW that is based on employment with a non-claim employer shall be calculated by adding together the wages paid to the IE during the 13 weeks immediately preceding the injury and dividing that result by 13. If the IE has not worked for 13 weeks or more prior to the DOI, the wages used to determine the AWW are those paid by the employer to a similar employee, who performed similar services and earned wages during the previous 13 weeks. If there is no similar employee at the employer's business, the AWW is determined using the wages earned by a similar employee who performed similar services in the same vicinity. The wages paid to that person during the 13 weeks prior to the DOI are added together and divided by 13. 28 TAC Section 128.1(h)(2). Wages used to determine AWW from a non-claim employer shall include only those wages reportable for federal income tax purposes. TLC Section 408.042(e); 28 TAC Section 128.1(h)(2). The IE must have earned income from the non-claim employer during the 13 weeks prior to the DOI or there can be no adjustment to the AWW for multiple employment. APD 030164-s. The IE has the burden to establish the wages earned from the non-claim employer. APD 052864-s. A Multiple Employment Wage Statement may be filed after the date of MMI. APD 151496-s, referenced in the APD 171228 case summary above, clarifies that 28 TAC Section 122.5 does not establish a deadline for filing a Multiple Employment Wage Statement to the IC. 28 TAC Section 122.5(f) defines the time period, up to the date the IE reaches MMI, for which IEs filing Multiple Employment Wage Statements must report any change in employment status or wages to the IC.

Volunteer Firefighters. 

The IE sustained a compensable injury while performing his duties as a volunteer firefighter. In addition to his work as a volunteer firefighter, the IE earned wages from two different employers. The ALJ calculated a wage for the IE as a volunteer firefighter and then combined that amount with the wages from the IE’s employment with the two non-claim employers to determine his AWW. The AP reversed and rendered, holding that, because the IE earned no wages as a volunteer firefighter, his AWW could only be based on his wages from the two non-claim employers. APD 050140.

The IW's AWW shall be calculated using gross wages. Section 128.1(d). The amount of income benefits and death benefits an IW or an IW's legal beneficiaries are entitled to be paid is based upon the IW's AWW.

Except as provided by Section 128.7 regarding school district employees, the IW's gross wages include all pecuniary and nonpecuniary wages paid by the employer prior to the DOI, but not nonpecuniary wages paid to the IW by the employer after the injury. Section 128.1(b); APD 042756-s. Nonpecuniary wages paid to the IW by the employer after the DOI are not included in the IW's AWW calculation, except as provided by Section 128.1(c)(2). Sections 408.045 and 128.1(c)(2); APD 042756-s. Pecuniary and non-pecuniary wages are defined in Section 126.1.

Section 128.1(a) provides that the method of calculating an IW's AWW is dependent on whether the IW was employed:

(1) as a full-time employee (see Section 128.3 for calculation method);

(2) as a part-time employee (see Sections 408.042 and 128.4 for calculation method);

(3) as a seasonal employee (see Sections 408.043 and 128.5 for calculation method);

(4) as a school district employee (see Sections 408.0446 and 128.7 for calculation method); and

(5) as a multiple employment employee (see Sections 408.042 and 128.1(h) for calculation method).

AWW Includes: 

Section 401.011(43) defines wages. Unless a specific exception is provided for, such as when dealing with school district employees, in addition to an IW's paycheck and any paycheck from concurrent employment, which will be discussed in the sub-section entitled MULTIPLE EMPLOYMENT, the following are some of the things which are included in calculating the IW's AWW:

Nonpecuniary Wages. 

Nonpecuniary wages are wages paid to an IW in a form other than money. Nonpecuniary wages do not include reimbursement for expenses incurred by the IW. APD 032882. If the employer stops paying the IW these nonpecuniary wages after the DOI, they are included in calculating the IW's AWW for purposes of income benefits. APD 060272-s. When the value of the nonpecuniary wage is in dispute, it becomes a question of fact for the HO to resolve. APD 060272-s. Section 126.1(2) provides that nonpecuniary wages include, but are not limited, to the following:

(A) Health insurance premiums.

(B) Laundry/cleaning.

(C) Clothing/uniforms.

(D) Lodging/housing/rent.

(E) Payment of professional license fees.

(F) Food/meals.

(G) Provision of a vehicle/fuel.

Pecuniary Wages. 

Pecuniary wages are wages paid to an IW in a form of money. Section 126.1(3) provides that pecuniary wages include, but are not limited, to the following:

(A) Hourly, weekly, biweekly, monthly (etc.) wages.

(B) Salary.

(C) Piecework compensation.

(D) Any monetary allowance such as for health insurance premiums, vehicle/fuel, food/meals, clothing/uniforms, laundry/cleaning, or lodging/housing/rent.

(E) Monetary bonuses earned or accrued by the IW.

(F) Commissions.

AWW Does Not Include: 

An IW's AWW does not include nonpecuniary wages during any period that the employer continues to pay them to the IW. Section 408.045. An IW's AWW does not include payments made by the employer to reimburse the IW for the use of the IW's equipment, for paying helpers, for reimbursing actual expenses related to employment such as travel related expenses, or reimbursing mileage up to the state rate. Section 128.1(c )(1).

Calculating AWW In General. 

The method of calculation used to determine the amount of the IW's AWW is dependent upon the type of employment the IW had at the time of the compensable injury. Section 128.1(a). Adjustment of an IW's AWW will be discussed in sections (W02) and (W03). Calculation of an IW's AWW for SIBs will be discussed in (W04).

Full Time Employee. 

A full time employee is one who regularly works at least thirty hours per week and has a schedule comparable to other employees of that company and/or other employees in the same business or vicinity who are considered full time. Section 128.3(a).

The AWW for a full time employee is determined by adding together the wages paid to the IW during the 13 weeks immediately preceding the injury and dividing that result by 13. Section 408.041(a); Section 128.3(d). If the IW has not worked for 13 weeks or more prior to the DOI, the wages used to determine the AWW are those paid by the employer to a similar employee who performs similar services and earned wages during the previous 13 weeks. If there is no similar employee at the employer's business, the AWW is determined by using the wages earned by a similar employee who performed similar services in the same vicinity. The wages paid to that person during the 13 weeks prior to the DOI are added together and divided by 13. Section 408.041(b); Section 128.3(e).

Similar Employee/Services. 

For the purpose of determining the AWW of a similar employee's services or employment, the employee's training and experience, nature of the work and number of hours normally worked must be considered. Section 408.046. A similar employee is one with training, experience, skills, and wages similar to the IW. Section 128.3(f)(1); APD 991273. Similar services are tasks performed or services rendered that are comparable in nature to, and in the same class as, those performed by the IW, and that are comparable in the number of hours normally worked. Section 128.3(f)(2); APD 042996.

Fair, Just, and Reasonable Determination. 

If the above methods described cannot reasonably be applied to calculate the AWW, the Division may compute the AWW in a way that is fair, just, and reasonable to both parties. Section 408.041(c); Section 128.3(g). Whether the fair, just, and reasonable method of calculating the AWW should be used is a question of fact for the HO to resolve. APD 040467.

The IW received wages from the employer for the 11 weeks immediately preceding his compensable injury. The number of hours worked by the IW in each week varied from 8 hours to over 52 hours. No evidence was presented as to what a same or similar employee would have made during the 13 weeks preceding the compensable injury. The HO determined that it was fair, just, and reasonable to both the IW and the IC to calculate the IW's AWW by dividing the gross wages paid by the employer over the 11 weeks immediately preceding the compensable injury by 11. The HO's determination was not against the great weight and preponderance of the evidence. APD 030164-s.

Part Time Employee. 

The calculation for determining the AWW used to determine TIBs for IWs who work part time is the same as that for calculating the AWW of full time employees. Section 128.4(a).

For purposes of calculating AWW for all other income and death benefits, part time employees are considered in two different categories: those who worked part-time as a regular course of conduct, and those who did not. Section 128.4(b).

Determining Regular Course of Conduct. 

To determine if an IW works part time as regular course of conduct, the IW's work pattern during the 12 months preceding the injury is considered. If the IW only worked part time during that 12 month period, they are presumed to have worked part time as a regular course of conduct. Section 128.4(b). Section 128.4(c) provides the method for calculating AWW for an IW who worked part time as a regular course of conduct.

Not in the Regular Course of Conduct. 

To determine the calculation of AWW for IWs who did not work part time as a regular course of conduct, please see Section 128.4 (e) and (f).

Seasonal AWW Disputes. 

[Cross-reference: Seasonal AWW Disputes (W05).]

A seasonal worker is an employee who, as a regular course of conduct, participates in seasonal or cyclical work, which does not continue throughout an entire year. Section 408.043(d); Section 128.5(a).

In determining whether an IW is a seasonal worker, the IW's past work history, rather than the nature of the IW's employment on the DOI, is considered. APD 001922. The fact that an IW agrees to work for a fixed period called a "season" does not make the IW a seasonal employee. APD 992884. Whether an IW is a seasonal employee is a question of fact for the HO to resolve. APD 031080.

Calculation. 

The seasonal IW's AWW used for calculating TIBs should be adjusted as often as necessary to reflect the wages the IW could reasonably have expected to earn during the period that TIBs are paid. Section 408.043(a). The IC that seeks adjustment of the IW's AWW has the burden of proving that the IW was a seasonal employee. APD 002390. Evidence of a seasonal IW's earnings must be submitted at the time an adjustment is requested and must include proof of the IW's earnings in corresponding time periods in previous years. Section 128.5(c); APD 93015.

Fair, Just, and Reasonable Determination. 

If the Division determines that is impractical to calculate the AWW in one of the methods described, the Division may compute the AWW in a way that is fair and just to both parties. Section 408.043(c); Section 128.5(d)(2). Before making a fair, just, and reasonable determination, the Division must state why it is impractical to use one of the other methods for determining AWW. APD 970605. The sole fact that the IW is a seasonal employee, and does not work for the employer on a yearly basis, does not make it impractical to use one of the other methods for determining AWW. APD 971082.

School District Employees. 

The AWW of a school district employee is based on the amount of wages earned by the employee in a week, and not on the amount actually paid to the employee during that week. The amount of wages earned by the employee is equal to the amount that would be deducted from the employee's salary if the employee were absent from work for one week without available leave. Sections 408.0446(a); Section 128.7(b).

IIBS Adjustment. 

The IW, an employee of a school district, sustained a compensable injury approximately a month and a half after her date of hire. The IW had been employed by several other employers during the year prior to her employment with the school district, and provided evidence of wages earned by the other employers during that time. The HO determined the AWW for IIBs based on a "fair and reasonable" method. The AP reversed the HO's decision and remanded the case for a determination of the AWW for IIBs based on the total wages the IW earned in the 12 months immediately preceding the DOI, divided by 50 weeks, in accordance with Sections 408.0446(c) and 128.7(e). In so doing the AP noted that the only provision for using a "fair and just" method is in Section 408.0446(d), which provides for computing AWW using a fair and just method if it is determined by the commissioner that computing the AWW as provided by Section 408.0446 is impractical because the employee did not earn wages during the 12 months immediately preceding the DOI. The AP pointed out that in this case the IW proved she earned wages during the 12 months preceding the injury. The AP also noted that Section 128.7(e)(2) does not require that the "other employers" be non-claim employers and that the IW still be employed with them at the time of the injury. APD 080268-s.

TIBs Adjustment. 

The IW had a 187 day contract to work, and the wages were to be paid over the entire year. The IW worked during the summers of 1999 and 2000. The IW did not work during the summer of 2001, but attended several mandatory training meetings. The HO did not allow an adjustment of the AWW, stating that it could not have been the legislative intent of this act or the rule that a teacher loses her contract pay and workers' compensation benefits just because she doesn't work for the summer due to her compensable injury. The AP reversed and remanded the decision. The HO is to determine what, if anything, the IW could reasonably expect to earn during the summer of 2002 if she had not been injured. If the HO determines that the IW did not reasonably expect to earn wages, the IC is entitled to adjust the IW's AWW to zero. APD 022860-s.

The IW was a non-contract employee who had worked summers in the past about half of the time. Due to the compensable injury, the IW could not have worked during the summer of 2002. The HO was not persuaded that the school would not have hired the IW for the summer of 2002. The AP affirmed the determination that the AWW adjustment for the summer break should be calculated based on the wages of a same or similar employee during the same time period. APD 030007.

Non-Written Contract Employee. 

For a school district employee who is employed on a non-contract basis, AWW for determining TIBs shall be computed by dividing the total gross wages earned in the previous 13-week period immediately proceeding the DOI by 13. Section 128.7(c)(2).

Written Contract Employee. 

For determining the amount of TIBs a school district employee is entitled to, the AWW is computed by dividing the amount the employee would have been paid under the completed contract by either the number of days the employee was required to work under the contract and then multiplying by five, or by dividing the amount the employee would have been paid under the completed contract by the number of months covered under the contract and then dividing that result by 4.34821. Section 128.7(c)(1).

Multiple Employment Employee. 

[Cross-references: Multi Employment AWW Dispute (W06)Entitlement to Multi Employer Benefits (I25)].

When an IE is employed by more than one employer on the DOI, the IC shall calculate the AWW for that IE using the wages from all of the employers. For this purpose, the IE is required to submit a Multiple Employment Wage Statement (DWC Form-003ME) to the IC. 28 TAC Section 128.1(h).

Claim Employers. 

The claim employer is who the IE worked for at the time of the injury and with whom the IE filed a claim for workers' compensation benefits. 28 TAC Section 122.5(a)(1). The portion of the AWW based on employment with the claim employer shall be calculated according to how the IE’s AWW would be determined if the IE did not have multiple employment. 28 TAC Section 128.1(h)(1).

Non-Claim Employers.

A non-claim employer is any employer, other than the claim employer, who employed the IE on the DOI. 28 TAC Section 122.5(a)(2). An IE employed by a non-claim employer, in addition to the claim employer, at the time of the injury is allowed an adjustment in income benefits based on this employment.

Under 28 TAC Section 122.5(d), the Multiple Employment Wage Statement shall include:

(1) the [IE’s] name, address, and social security number;

(2) the date of the [non-claim employer’s] hire of the employee;

(3) the [DOI];

(4) the [non-claim employer’s] name, address, and federal tax identification number;

(5) the name and phone number of a person at the [non-claim employer] who can be contacted to verify the wage information (unless the wage information was not provided by a person at the [non-claim employer] - such as if the wage information came from the Texas Workforce Commission or the employee's pay stubs);

(6) the wage information required by subsection (e) of this section with documentation that supports the wage information being reported; and

(7) a certification that the wage information provided includes all wage information required by subsection (e) of this section and that the information is complete and accurate.

Among other issues in the case, the ALJ decided that the IE was employed by a non-claim employer, but she was not entitled to increased income benefits under TLC Section 408.042 and 28 TAC Section 128.1(h). The ALJ’s decision on this issue was based on her statement that she could not determine when the IE filed the Multiple Employment Wage Statement with DWC and the IC. The AP found that the ALJ’s failure to consider the document under those circumstances was legal error, writing that the IE effectively submitted the document to the IC and DWC by the exchange of that document and its admission into evidence at the CCH. In addition, the AP pointed to APD 151496-s, in which it clarified that 28 TAC Section 122.5 does not establish a deadline for filing a Multiple Employment Wage Statement. The AP ultimately affirmed the ALJ’s decision that the IE was not entitled to increased income benefits under TLC Section 408.042 and 28 TAC Section 128.1(h), because the Multiple Employment Wage Statement did not contain all of the information required in 28 TAC Section 122.5(d), namely the non-claim employer’s address or federal tax identification number. APD 171228.

The portion of the IE’s AWW that is based on employment with a non-claim employer shall be calculated by adding together the wages paid to the IE during the 13 weeks immediately preceding the injury and dividing that result by 13. If the IE has not worked for 13 weeks or more prior to the DOI, the wages used to determine the AWW are those paid by the employer to a similar employee, who performed similar services and earned wages during the previous 13 weeks. If there is no similar employee at the employer's business, the AWW is determined using the wages earned by a similar employee who performed similar services in the same vicinity. The wages paid to that person during the 13 weeks prior to the DOI are added together and divided by 13. 28 TAC Section 128.1(h)(2). Wages used to determine AWW from a non-claim employer shall include only those wages reportable for federal income tax purposes. TLC Section 408.042(e); 28 TAC Section 128.1(h)(2). The IE must have earned income from the non-claim employer during the 13 weeks prior to the DOI or there can be no adjustment to the AWW for multiple employment. APD 030164-s. The IE has the burden to establish the wages earned from the non-claim employer. APD 052864-s. A Multiple Employment Wage Statement may be filed after the date of MMI. APD 151496-s, referenced in the APD 171228 case summary above, clarifies that 28 TAC Section 122.5 does not establish a deadline for filing a Multiple Employment Wage Statement to the IC. 28 TAC Section 122.5(f) defines the time period, up to the date the IE reaches MMI, for which IEs filing Multiple Employment Wage Statements must report any change in employment status or wages to the IC.

Volunteer Firefighters. 

The IE sustained a compensable injury while performing his duties as a volunteer firefighter. In addition to his work as a volunteer firefighter, the IE earned wages from two different employers. The ALJ calculated a wage for the IE as a volunteer firefighter and then combined that amount with the wages from the IE’s employment with the two non-claim employers to determine his AWW. The AP reversed and rendered, holding that, because the IE earned no wages as a volunteer firefighter, his AWW could only be based on his wages from the two non-claim employers. APD 050140.

Actual coverage of an IE is a threshold requirement for establishing the liability of an IC. APD 022268-s; TLC Section 401.011(44) lists three methods to provide workers' compensation insurance coverage:

  1. purchasing an insurance policy;
  2. providing certified self-insurance or group self-insurance; or
  3. coverage provided by a governmental entity.

See also TLC Section 406.003.

Under Chapter 91 of the Labor Code, either a professional employer organization (PEO) or its client may provide workers’ compensation insurance coverage for all covered employees. A certificate of insurance coverage or other evidence of coverage showing that either a PEO or a client maintains workers' compensation insurance coverage constitutes proof of workers' compensation insurance coverage for the PEO and the client with respect to all covered employees of the PEO and the client. TLC Section 91.006.

Except for public employers and as otherwise provided by law, it is optional for an employer to provide workers' compensation insurance coverage. TLC Section 406.002(a). If an employer elects to provide workers' compensation coverage, recovery of workers' compensation benefits is the exclusive remedy of an IE or their legal beneficiary or beneficiaries against the employer for the death of or a work-related injury the IE sustains. TLC Section 408.001(a). However, exemplary damages by the surviving spouse or heirs of the deceased employee, whose death was caused by an intentional act or omission of the employer or by the employer's gross negligence, are not prohibited. TLC Section 408.001(b).

An IC cannot waive into coverage where none existed by failing to observe the timely defense provisions of TLC Section 409.021. APD 022268-s, citing Houston General Insurance Co. v. Association Casualty Insurance Co., 977 S.W.2d 634 (Tex. App.-Tyler 1998, no writ).

Cancellation or Non-Renewal of Coverage by the IC.

An IC that cancels or does not renew a workers' compensation insurance policy by its anniversary date must deliver notice of the cancellation or non-renewal by certified mail, in person, or by electronic means in accordance with Chapter 35, Insurance Code to the employer and DWC not later than the 30th day before the date on which the cancellation or non-renewal takes effect. However, under TLC Section 406.008(a)(2), notice is required not later than the 10th day before the date on which the cancellation or non-renewal takes effect if the cancellation or non-renewal is because of the following:

(A) fraud in obtaining coverage;

(B) misrepresentation of the amount of payroll for purposes of premium calculation;

(C) failure to pay a premium when due;

(D) an increase in the hazard for which an employer seeks coverage that results from an act or omission of the employer and that would produce an increase in the rate, including an increase because of a failure to comply with:

(i) reasonable recommendations for loss control; or

(ii) recommendations designed to reduce a hazard under the employer's control within a reasonable period; or

(E) a determination made by the commissioner of insurance that the continuation of the policy would place the insurer in violation of the law or would be hazardous to the interests of subscribers, creditors, or the general public.

The IC's failure to give notice as required results in an extension of the policy until the date on which the IC complies with the required notice. TLC Section 406.008 and 28 TAC Section 110.1. The IC has the burden of proof to show compliance with TLC Section 406.008(c). APD 981597.

IC Failed to Establish Cancellation or Non-Renewal.

At issue was whether the subclaimant/employer had workers' compensation insurance coverage with the IC on the date of injury. In evidence was an IC's Notice of Coverage/Cancellation/Non-Renewal of Coverage showing the effective dates of coverage and listing the type of transaction as "carrier 30 day cancellation/non-renewal." The date the IC notified the employer of cancellation was left blank in the notice. The subclaimant/employer denied receipt and no evidence to the contrary was presented. The ALJ determined that the IC did not provide workers' compensation coverage for the subclaimant/employer. The ALJ's determination was reversed and a new decision rendered that, because the IC failed to establish that it gave notice as required by TLC Section 406.008(a), the policy was extended pursuant to Section 406.008(c) and the employer did have workers' compensation coverage with the IC on the date of injury. There was no evidence that the IC gave notice of non-renewal of coverage by certified mail or in person (the only means of providing notice allowed under TLC Section 406.008(a) at the time of this case) to either the employer or DWC at any time, much less within the required timeframes in TLC Section 406.008. The AP held that the IC failed to comply with the requirements of TLC Section 406.008 and therefore as a matter of law failed to establish either cancellation or non-renewal of coverage. APD 050931.

Cancellation or Non-Renewal of Coverage by the Employer.

An employer who terminates workers' compensation insurance coverage is required to file a written notice with DWC not later than the 10th day after the date on which the employer notified the IC to terminate coverage. Termination of coverage takes effect the later of the 30th day after the date of filing of notice with DWC or the cancellation date of the policy. The coverage shall be extended until the date on which the termination of coverage takes effect, and the employer is obligated for premiums due for that period. TLC Section 406.007.

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