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October20

S.D. Supreme Court rules on work comp case

On May 6, 2015, the South Dakota Supreme Court issued its decision in a worker’s compensation case titled: Wheeler v Cinna Bakers, Inc., 2015 SD 25.

 

Wheeler was an employee of Cinna Bakers (Cinnabon at the Empire Mall), but was concurrently employed at a convenience store, as well as a casino in order for her to reach the general equivalent of full-time earnings.

 

As a result of the injuries sustained at Cinna Bakers, Wheeler was also unable to work at her other two jobs. Cinna Bakers and its insurer agreed the injuries were compensable. However, Ms. Wheeler argued that her compensation rate should be computed based on her earnings from all three of her jobs.

 

Cinna Bakers argued South Dakota statute governing computation of average weekly wage requires consideration of only her wages at Cinna Bakers, and not an aggregate that includes other jobs.

 

As the case made its way through the process, the Department of Labor ruled in favor of Cinna Bakers and a Circuit Court affirmed the decision; agreeing that average weekly wage should be calculated using only Ms. Wheeler’s wages at Cinna Bakers.

 

In the final leg of the appeal process, the South Dakota Supreme Court reversed the decision; interpreting the statute in the employee’s favor. The court held that when an employee suffers a work injury that prevents him or her from performing concurrent employment, the earnings from those employers must be aggregated to compute average weekly wage.

 

The court’s reasoning is detailed in the opinion, which is available here.

 

The short-term impact of the decision is employees who concurrently hold two or more jobs and suffer an injury at one of the jobs that prevents them from working will see an increase in their worker’s compensation benefits.

 

The court’s decision benefits an employee in that situation and for an employer or insurer anything that tends to impact overall costs of a claim, also potentially increases premiums.

 

“For insurers and their claim handlers, the decision raises many questions,” ASBPT Director Matt Flett said. “Any changes will likely come through the legislative process or subsequent judicial decisions.”

 

ASBSD and ASBPT will continue to monitor the situation and provide updates as available.

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