Monday, June 8, 2015

Will workers’ compensation cover income lost from my second job?

About 5% of the employed labour force in North America works more than one job concurrently.  In some jurisdictions, the prevalence is even higher.  Multiple jobholders in South Dakota accounted for 9.5% in 2012.
Who works multiple jobs?  Having two or more concurrent jobs is most prevalent among young adults (ages 20-24) and single women (including divorced, separated and widowed)(BLS Current Population Survey  labor force statistics table 36. Feb 12 2015).  One study found that nearly three in five multiple job holders were “employees” in a primary and secondary job; four in five were employees in at least one of their jobs (Statistics Canada  Labour Force Survey – Multiple Job Holders  2007 data).          .
Consider the case of Mary, a care aide (Job A)  working   30 hours weekdays  in a care facility and 20 hours evenings and weekends in a hotel restaurant and bar as a server (Job B).  Mary is paid $20 per hour in Job A and earns $10 an hour in Job B for a total of $800 per week. What happens if a work-related injury or disease results in Mary being temporarily disabled  from her concurrent employment in Job A and Job B? 
The answer depends on  where in North America Mary works.  About half the workers’ compensation jurisdictions have some provisions that cover concurrent employment.   However, that doesn’t always mean Mary will get anything close to her net or spendable earnings.
 Hawaii explains the law this way:
Any employee who meets the eligibility requirements must be provided with TDI [Temporary Disability Insurance]  coverage by the employer. If you were in concurrent employment or had more than one job, whether full-time or part-time, you may qualify for TDI benefits from each employer if you meet the eligibility requirements.
Alberta’s WCB policy on concurrent employment is similar:
When a worker with a compensable injury has two or more jobs concurrently (at the same time), the WCB will pay compensation for earnings of the jobs from which the worker is disabled due to the compensable injury.  The combined earnings must not exceed the maximum insurable earnings in effect at the date of the accident…
Other jurisdictions that allow coverage for concurrent employment restrict that coverage to earnings that would be within the scope of employment covered by workers’ compensation.  WorkSafeNB’s policy on multiple/ concurrent employment states:
If an injured worker has more than one job, the injured worker’s regular and part-time earnings are used when determining average earnings, provided the earnings from the accident employer are covered under the WC Act and the injured worker is disabled from working at the other employment.
The Idaho statute allows the coverage for concurrent employment as long as the accident employer is aware of the other job or jobs:
When the employee is working under concurrent contracts with two (2) or more employers and the defendant employer has knowledge of such employment prior to the injury, the employee's wages from all such employers shall be considered as if earned from the employer liable for compensation.
Some jurisdictions have specific procedures including specialized forms for reporting concurrent employment and qualifications concerning the type of income that can be reported and used to determine compensation.  The Texas Labor Code, for example, contains an extensive section on multiple employment  and includes the following qualification:
For an employee with multiple employment, only the employee's wages that are reportable for federal income tax purposes may be considered.
In a few states, the provision for including a concurrent job’s earnings in temporary disability compensation calculations includes a “similarity” clause.  Coverage for lost wages may be provided if the job is “related”.  For example, Georgia’s State Board of Workers’ Compensation Procedure Manual (page 1-4)  notes:
2.  Average weekly wage computation: …
b.  If the employee has similar concurrent employment, the wages paid by all similar concurrent employers must be included in calculating the average weekly wage. If the concurrent employment is of the same general nature, it is similar. For example, a record clerk and a sales clerk are similar employment.
In states with this provision, earnings from second or subsequent “dissimilar”  jobs may not be covered  at all.  Workers with dissimilar or otherwise excluded concurrent employment are forced to bear any loss they might incur as a result of a work-related injury in the covered job.  It is not clear if Mary’s two jobs are similar enough to qualify for concurrent employment coverage.
That burden of an uncompensated loss was explicitly noted in an online article contrasting the exclusion of concurrent  earnings in the case of North Carolina.  Workers’ compensation attorney, Brad Smith,  writes:
Unfortunately, in North Carolina, in most cases, the workers’ compensation carrier is not required to pay weekly disability benefits based on your wage loss from working concurrent jobs. Instead, the carrier will pay you based only on the wages you were earning at the job you were working at the time of your injury. In many cases this will produce a result that most would consider unfair. This is especially true if the job you were performing at the time of your injury was a part time job that you were working in addition to your higher paying full time job
If Mary is injured in Job A and can’t work in Job A or Job B, her wage replacement at the typical 2/3rds gross may be as low as 50% of her combined gross earnings  in a state that does not recognize earnings from Job B.  Worse yet, if the injury occurs in Job B, Mary may only receive 2/3rds of $200 per week –just 17% of her combined gross.  Small compensation for an exclusive remedy.
 If “the primary basis for determining workmen’s compensation benefits should be lost remuneration” [National Commission on State Workmen’s Compensation Laws] then it is surprising that so few states and provinces actually consider all income from concurrent employment without restriction.
It is unlikely that Mary or anyone holding down two or more jobs will have the wherewithal to purchase voluntary disability coverage.  If injured in anything other than a work-related injury, her full loss would be part of a claim and possible tort action. 
This wide variation in treatment of concurrent earnings  in workers’ compensation jurisdictions points out that at least some states and provinces have found a way to cover concurrent income to the limit of the maximum insurable or maximum benefit, often without onerous restrictions.  It begs the question:  Why not the rest?

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