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Legal news, information, and interviews from Collins & Lacy, a leading South Carolina defense firm for construction, worker’s comp, hospitality, retail, trucking, professional liability, mediation, government, and ethics matters. The views expressed by the guests are their own and do not necessarily reflect that of Collins & Lacy, its management, or employees. This is The Legal Bench.
Michael Burney: Welcome to The Legal Bench. I’m Michael Burney, Director of Business Development at Collins and Lacy Law Firm in Columbia, and with is Attorney Lauren Trask. She defends employers and their carriers for workplace claims across the state of South Carolina. Today she is here to explain a well-known form in the worker’s compensation arena and that is Form 20. Lauren, what is a Form 20?
Lauren Trask: So Form 20 is a form used in worker’s compensation claims to show the statement of earnings of an injured person and it can help identify the average weekly wage and compensation rate for the injured worker.
MB: How do you figure out the average weekly wage?
LT: There are actually four methodologies for figuring out the average weekly wage and one of the best ways to do so is if your injured worker has been at that place of employment four quarters prior to the accident. So, four quarters would not necessarily mean the actual year prior. Say the injured worker was injured in January of 2018. You don’t necessarily need just the wage records from January of 2017, what you really look to are these four quarters which can actually be remembered quite easily if you remember 3, 6, 9, 12. Those are the quarters you’re looking for. For an injury in January 2018, you want the four quarters prior which would end with 12 which would be December 31, 2017, and then the quarter prior to that would end with September 30, 2017 (so 9), and the quarter prior to that is June 30, 2017 (so 6), and then the first quarter would be March 31, 2017 (so 3), so there’s your 3, 6, 9, and what that actually means is in order to get that very first quarter ending March 31, 2017, you need the wage records from January 1, 2017. In this case, what you’d really want is the wage records of this injured worker from January 1, 2017, through December 31, 2017, to get your four quarters prior. So, when you have those four quarters prior that would obviously mean that person had been hired prior to those four quarters. In that situation, it would be somebody hired any time before January 1, 2017. If you don’t have somebody that has been hired four quarters or more prior to the injury date, then another option, so Option 2 to figuring the average weekly wage, would be to use the actual time worked. Say this person had only worked for six months or so prior to the accident date, you would use the wage records from those six months and you would divide them by the weeks worked to get your average weekly wage for this employee. A third option for the average weekly wage determination would be if you needed to use the earnings with the wage records of a similar employee. So, you could do that to figure out the injured worker’s average weekly wage. The fourth alternative would be if you were going by some alternative method, such as, if you had gotten the Department of Employment work force records to determine the four quarters prior to the accident of wages for this employee, then you could use those Department of Employment workforce records to determine the average weekly wage and you would attach those to your Form 20. In order to actually determine the average weekly wage, if you have those four quarters which I am going to use as my example, if you have those 3, 6, 9, 12 four quarters prior, then you would fill that in on the Form 20. If there any other allowances, which could be something along the lines of a cellphone allowance, that would be added in, there’s a line to do so, Line 3. If you just have those four quarters with no allowances, then you would put that number in Line 2 and Line 4 on the Form 20 and you would take the amount of week’s work, so if you actually have those four quarters, presumably 52 weeks, sometimes it might be less, but presumably 52 weeks, you would divide that total wage amount by 52 to get your average weekly wage which would end of being filled in on Line 6.
MB: So once you have all that how do you figure out the compensation rate?
LT: So once you have an average weekly wage you come up with an estimated compensation rate, which would be multiplying the average weekly wage by .667, so two-thirds of the average weekly wage and that would get filled in on Line 7. There are other options for the compensation rate such as if the average weekly wage is less than $75, then the compensation rate is the average weekly wage and you would check that box off. If the estimated compensation rate on Line 7 is less than the $75 and the average weekly wage is actually more than $75, the compensation rate would be $75. That is also a box to check on the form. When the estimated compensation rate is more than the maximum compensation rate for the year in which the injury occurred, then you enter the max compensation rate on Line 8, and again, there’s a box to check on the form for that. If the employee is within the exceptions listed in S.C. Code Ann. § 42-7-65, which are individuals such as state national guard members, volunteer firemen, and there’s several others listed in that statute, then that average weekly rate is dictated by that statute and there’s a formula within the statute to figure that out.
MB: So, help us understand when do you file a Form 20?
LT: You serve a Form 20 within thirty days after temporary total disability or temporary partial disability begins. You can also complete the Form 20 when no temporary total disability or temporary partial disability has been paid and you would prepare and file and serve the Form 20 with the request for an informal conference or hearing. Sometimes you have a claim where you’re just trying to get it settle so you wanting to an informal conference, or you have a claim where there’s a hearing involved so you would prepare the Form 20 and file it with that request, or you could also prepare, file and serve the Form 20 within thirty days of a claimant’s request for a hearing or an informal conference. So those are the options in that realm.
MB: What are some issues that can come up when we’re talking about Form 20?
LT: Sometimes there’s a disputed compensation rate and there are cases where the claimant would disagree with the compensation rate on the Form 20 and that claimant can call the carrier and try to reconcile the differences, or the attorney, and try and figure it out and determine whether they can agree to one. If no agreement can be had, then you can refer the question to the Commissions Claims Department for an administrative recommendation and then if the claimant still does not agree, you can always file a Form 50 requesting a hearing on that matter. There’s also, if the maximum compensation rate is within play in the matter, then the parties can stipulate the maximum compensation rate.
MB: Are life insurance payments included when calculating an average weekly wage?
LT: So medical disability and life insurance payments could not be included when calculating an average weekly wage where they would not in lieu of wages or specified part of a wage contract.
MB: What about incarcerated individuals?
LT: The average weekly wage is capped for inmates. It’s capped at $40 per week and that’s pursuant to that code section that we discussed previously which is Section 42-7-65. Inmates are not allowed to combine wages for a higher average weekly wage either.
MB: What is the maximum compensation rate? I think you mentioned that a little bit earlier, so what is that?
LT: The maximum compensation rate for 2021 is $903.40. That maximum compensation rate changes year to year and you can actually find maximum compensation rate for whatever year you are looking for on the Collins and Lacy website and we actually have several other great resources on that website. There’s some calculators to figure out the number of weeks, or again the maximum compensation rate, and you can look to those resources if you go to CollinsandLacy.com, there’s a menu in the top right corner and if you scroll down that menu to calculator that will take you to the page to see multiple calculators for difference options that you might find to be great resources.
MB: I think that’s one of the more popular pages on our website. I think it gets a lot of traffic. That’s fantastic. We want to thank you Lauren Trask, attorney here at Collins and Lacy, for explaining this form to us. And join us next time right here for legal news of interest to South Carolina businesses right here on The Legal Bench.