THE TEACHER EXCEPTION FOR CALCULATING AVERAGE WEEKLY WAGE IN IOWA

Although sometimes overlooked, calculating the average weekly wage of an employee can involve a complex process. One of the most common exceptions to the general rules for calculating an average weekly wage is for teachers or para-educators who defer a portion of their salary over the summer.

In Iowa, the statute dictates that employers pay benefits based on the employee’s gross weekly earnings, which are to be determined under Iowa Code section 85.36. Courts in Iowa have routinely held that teachers are often paid monthly under their contracts, so their weekly earnings should be calculated according to section 85.36(4). See Area Educ. Agency 7 v. Bauch, 646 N.W.2d 398, 402–03 (Iowa 2002). However, the typical monthly payment structure does not take into consideration teachers and other employees who defer a portion of their earnings. Id. at 402. The Iowa Supreme Court in Bauch held that “Section 85.61’s definition of ‘gross earnings’ necessarily includes the amount of compensation deferred throughout the year. We recognize that the multiplier in section 85.35(4) does not account for the fact that educators like Bauch do not necessarily work year-round.” Id.

The Bauch Court additionally recognized that legally, once the school year was over, teachers were not earning new wages; rather, they were collecting the wages they had already earned, and the calculation of their average weekly wage needs to account for this distinction.

Therefore, under Bauch, for a teacher paid on a monthly basis, his or her average weekly wage must be calculated by determining the teacher’s gross monthly earnings. For instance, under Bauch, the parties determined that claimant was paid $3,359.85 per month for 12 months; however, the Supreme Court determined that claimant actually earned $4,031.82 per month under her 10-month contract. This can be calculated by taking the monthly paycheck, multiplying it by 12, then dividing that figure by whatever the number of actual months worked is. For teachers this number is typically 10.

Once the correct monthly gross earnings are determined, calculating the second step of section 85.36(4) is relatively straightforward. The gross monthly earnings must be multiplied by 12 and divided by 52. The resulting figure constitutes claimant’s weekly earnings under the Bauch standard. As a result, claimant in Bauch had an average weekly wage of ($4,031.82 x 12 / 52) = $930.42.

It is important to note that claimants must show that they are deferring their earnings over the summer months. If they are paid only during the school year, then the Bauch standard likely does not apply.

This post was drafted by Connor Hansen, a law clerk at Baylor Evnen Wolfe & Tannehill. If you have any questions about how to calculate the average weekly wage of a teacher or similarly-situated employee, or any other questions regarding Iowa workers’ compensation, please reach out to Paul Barta or Micah Hawker-Boehnke at (402) 475-1075.