Section 14(5) of the Workers Compensation Law provides when a worker under the age of 25 is injured, the Board may take into account the reasonable expectation that the worker’s average weekly wage would have increased in the future had the injury not occurred. This is commonly referred to as the “Minor’s Wage Expectancy.” If the employee is under 25 at the time of injury, the minor’s wage expectancy can apply, which could potentially increase the claimant’s average weekly wage (AWW). The increase in the AWW could have a minor or major impact on the overall risk of the claim depending on how it would affect the overall permanency award. Some things to know when addressing the minor’s wage expectancy:
- A general rule has been established when minor’s wage expectancy applies: it must be based upon a possible advancement and increased earning capacity in the same employment. Employers are required to produce payroll for an employee who was in the same position, completed the same duties and had the same amount of experience. If it were anticipated that the claimant would have been promoted prior to turning 25, the Law Judge can consider wages of someone in the higher position who had the same numbers of years of experience the claimant would have had.
- In certain circumstances, if the claimant was enrolled in an educational program or training for a job that would have resulted in higher pay, the wages for that position could be considered by the Law Judge when setting the new AWW. For example, a Certified Nurses’ Assistant (CNA) who is injured but enrolled in nursing school and actively pursuing a nursing career, the Law Judge could set the minor’s wage expectancy based on the earnings of a registered nurse versus a 25 year old CNA.
- Minor’s wage expectancy only comes into play at the time of permanency. That means, if the claimant is classified with a loss of wage earning capacity the minor’s wage expectancy AWW would apply only to the awards paid after the start of the indemnity cap. If the claimant is entitled to a schedule loss of use (SLU award), the minor’s wage expectancy AWW applies when calculating the overall award.
When considering reserves on the claim and potential risk in cases where the claimant is under 25 at the time of injury, the employer or claims professional should investigate what the claimant’s educational or vocational pursuits were at the time of the injury. Claims professionals should work with employers to obtain proper evidence to mitigate the exposure, including comparing an employee who was in a similar position and experience when producing payroll for calculating minor’s wage expectancy.
