The Appellate Division affirms a judge of compensation’s granting of petitioner’s motion for reconsideration vacating a prior order that had approved settlement to reconstruct petitioner’s average weekly wage.
In this per curiam decision, the Appellate Division upheld a judge of compensation’s ruling that vacated a prior order approving settlement for the purposes of reconstructing an employee’s wages. The Appellate Division rejected the employer’s argument that the judge improperly revisited the prior compensation award and found that the employer presented no evidence at a hearing on the matter to justify voiding the judge’s order for reconstruction of wages.
The petitioner sustained a work-related injury. On August 24, 2016, the petitioner’s claim was settled amicably via an order approving settlement, signed by both the petitioner and the employer’s counsel, with a stipulated weekly wage of $276.17. The settlement was placed on the record before the judge, and with the petitioner’s consent, an order approving settlement was approved and signed by the judge.
In December 2016, after securing new counsel, the petitioner filed a motion for reconsideration as to the August 24, 2016, order approving settlement. In her motion, she argued that her wages were calculated incorrectly at the time the earlier order was entered, and she submitted wage statements demonstrating her wages were higher than reflected in the order. Citing Katsoris v. S. Jersey Publ’g Co., 131 N.J. 535 (1993), the petitioner contended that her wages should be reconstructed based upon full-time wages because she suffered a permanent injury while working, which prevented her from continuing to work full time. She specifically sought to vacate the earlier order and asked that her wages be reconstructed based on a 40-hour week.
At an initial hearing held on July 11, 2018, the judge granted the petitioner’s application. In his oral decision, the judge cited Rule 4:50-1(a), “which involves mistake, inadvertent surprise or excusable neglect.” The judge concluded that prior counsel’s mistake provided a basis for revisiting the issue of wage reconstruction and that the employer, despite its claims to the contrary, would suffer no prejudice in revisiting this issue. The judge accordingly vacated part of the settlement order approving settlement with respect to the average weekly wage and scheduled a hearing limited to “whether or not the wages were accurately calculated at the time the settlement was entered.”
On September 12, 2018, the judge conducted a hearing for the purpose of taking testimony on the issue of wage reconstruction. The petitioner testified that she was originally hired on a full-time basis at a rate of $11.50 per hour. Although she considered herself a full-time employee, she conceded that her hours varied from more than 40 hours per week to approximately 20 hours per week and that her hours were solely at the employer’s discretion. Despite these fluctuations, however, the petitioner testified that most of the time she worked more than 40 hours per week and that she was always available to work a 40-hour week. Although she attempted to work some hours after being injured, eventually she could not, and her hours were continually reduced until there was no longer any work for her to perform. The employer produced neither testimony nor documents in response to any of the petitioner’s contentions.
On January 16, 2019, the judge issued his oral decision in which he indicated that he based his findings of fact on the petitioner’s uncontroverted testimony and found that she was a full-time hourly employee, hired at the rate of approximately $11.50 per hour. He determined that, based on Katsoris, “there [was] credible evidence in this case of a permanent impact on future full-time wage-earning capacity in order to reconstruct . . . [Calero’s] wages.” He granted the petitioner’s motion, reconstructed her wages to reflect a weekly wage of $460 per week, and ordered the employer to reimburse her for the incremental increase in her prior permanency award resulting from her increased reconstructed wage. This appeal ensued.
In affirming the judge of compensation’s order, the Appellate Division revisited the holding in Katsoris, 131 N.J. at 543, in which the Supreme Court established a two-step process for determining if reconstruction of wages is appropriate. First the judge must determine if a petitioner, at the time her injuries were sustained, “worked fewer than the customary number of days constituting an ordinary week in the character of the work involved.” The judge must then consider whether the petitioner’s disability “represents a loss of earning capacity or has an impact on probable future earnings.” Thus, the Appellate Division reasoned, the critical inquiry is whether the petitioner demonstrated her injuries have disabled her with respect to her earning capacity in contemporary or future full-time employment. Applying the guiding principles of Katsoris, the Appellate Division concluded that it could not “think of a more fitting scenario, given the facts of this case, that calls out for wage reconstruction.”
The Appellate Division’s ruling here is not particularly surprising in that the employer produced neither testimony nor documentary evidence in response to any of the petitioner’s contentions. That notwithstanding, it is important to note that wage reconstruction is not triggered simply by stating that one has not returned to full-time employment following an injury. The court is required to consider an employee’s physical capabilities both at work and outside of work. If evidence is presented that the employee can, in fact, do full-time work based on the physical activities she is engaged in at home or in her leisure time, then wage reconstruction is not appropriate under the law.
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