Airborne Express, Inc. v. IWCC – Voluntary Overtime Excluded from AWW

This case involves the issue of overtime wages and whether to include them in the calculation of average weekly wages. The claimant here worked a standard eight-hour shift each day as a delivery driver, but was required to finish all his deliveries before his shift could be ended.

In addition, he could request voluntary overtime based on his seniority. Neither the claimant nor the regional manager for the employer could recall any time during the relevant year prior to the work injury when the claimant worked overtime other than voluntary. He earned $28,845.09 in regular wages during 32 weeks. He also worked 538.7 hours of overtime, including some hours in 31 of the 32 weeks. Two union representatives also testified regarding the overtime scheme, but apparently had no knowledge whether the petitioner worked any type of overtime other than voluntary. The arbitrator excluded the overtime, but the Commission included the hours at the straight-time rate for total earnings of $40,475.62. The circuit court confirmed the Commission.

On appeal, the appellate court referenced the exclusion of overtime in Section 10 of the WCA. The court noted the ordinary meaning of overtime is working time in excess of a minimum total set for a given period. The court then analyzed the following cases: Edward Hines and Ogle (finding that mandatory overtime should be included as part of the regular working hours of 67 and 48 per week, respectively); Edward Don Co. (holding that mere fact of overtime in 15 of 16 pay periods, without evidence overtime was mandatory, was insufficient to prevent exclusion under Section 10); and Freesen (overtime excluded where there was no evidence it was mandatory or a set part of regular hours worked each week).

In this case, the court noted that the claimant's regular hours were eight per day, and his overtime per week varied from .8 to 28.43 hours per week. Although the employer could require overtime, there was no evidence that the claimant was ever required to. The court stated that unless overtime is mandatory or a part of a fixed, consistent work week (in effect, becoming mandatory), then it must be excluded. To hold otherwise, stated the court, would render Section 10 meaningless. Therefore, the arbitrators calculation of wages and benefits was reinstated.

This decision does not change our view on average weekly wage here, but serves to confirm our practice. If overtime is voluntary, earnings are not included in the average weekly wage calculation. It would behoove all of us to examine our files and ensure that voluntary overtime was not included in the calculation. If it was, adjustments should be made in the temporary total disability rate as well as reserves for permanent partial disability. Also, if there has been an overpayment of temporary total disability look to recoup your losses.