No Income Means No Award for Widow
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Published: June 20, 2012
Tags: Judge Walter S. Felton Jr., Virginia Court of Appeals, Workers' Comp
A sole proprietor of a prefabricated home business did not take income in the two years prior to his death in a work-related auto accident, and his widow cannot collect a workers’ comp award based on a presumed 40-hour work week at the federal minimum wage; the Court of Appeals reverses the commission’s award.
Claimant, decedent’s widow, conceded that 2008 and 2009 joint federal income tax returns indicated the sole proprietorship operated at a loss and that it had continued to operate at a loss after decedent’s death. The carrier argues the commission erred by imputing to decedent an average weekly wage based on the federal minimum hourly wage in effect at the time of his accident as the evidence proved decedent had no wage earnings during the covered period.
The record lacks any evidence to support the commission’s finding that, were it not for his death, decedent, a sole proprietor, “would be earning” the federal minimum wage in effect at the time of his death, multiplied by a 40-hour work week. Claimant testified decedent paid himself fluctuating amounts from the draw account in the 52 weeks preceding his death and that the family business had continued to operate at a loss after decedent’s death.
We find no error in the commission’s determination that decedent’s weekly withdrawals from the draw account did not constitute wages under Va. Code § 65.2-101. This court has previously held that “wages” is a term applied to compensation paid to an employee as consideration for work, which constitutes a real economic gain for the employee.
A forensic accountant confirmed that the sole proprietorship operated at a net loss each week in the 52 weeks precedent decedent’s death and that decedent collected “no wages at all.” Under the circumstances here, where decedent’s weekly income consisted solely of borrowed funds, we cannot say such income constituted “earnings” for purposes of calculating his average weekly wage under Code § 65.2-101(1.b). The commission did not err in declining to calculate decedent’s average weekly wage based on the amount of his weekly draws.
The commission’s determination under Code § 65.2-101(1.b) that decedent would have earned $262 per week were it not for his death was without credible evidence to support it.
Award of benefits reversed and final judgment for the carrier.
Key Risk Ins. Co. v. Crews, Executrix (Felton) No. 2567-11-2, June 19, 2012; Workers’ Comp. Comm’n; Robert M. Himmel for appellant; Archibald Wallace III for appellee. VLW 012-7-184, 12 pp.
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