IOWA COURT OF APPEALS’ OPINION ADDRESSES IMPACT OF FMLA LEAVE ON AVERAGE WEEKLY WAGE CALCULATION

Recently, in Hermanstorfer v. Lennox Industries, Inc., the Iowa Court of Appeals ruled that an employee’s reduced hours due to taking leave under the Family and Medical Leave Act (FMLA) in the 13 weeks leading up to a work injury should not be included in the calculation of the employee’s average weekly wage (AWW).

In this case, the claimant had taken several short-term instances of FMLA leave for a personal health condition in the months leading up to the injury, which resulted in reduced hours and earnings. Both the deputy commissioner and commissioner determined that the claimant’s frequent use of FMLA leave created a pattern of reduced hours, contributing to a lower AWW than the employee would have had otherwise.

The claimant appealed, arguing that the weeks in which she took FMLA leave were not representative of her usual earnings and should be replaced with more typical earnings. The district court agreed with the claimant and reversed the decisions of the commissioner and deputy commissioner. The employer then appealed to the Court of Appeals.

The Court of Appeals affirmed the district court’s decision, emphasizing that the primary purpose of the Workers’ Compensation Act is to benefit the worker. In interpreting this law, the Court applied a liberal construction in favor of the employee. The Court of Appeals stated that the determination of “customary” earnings depends on the facts of each case and concluded that allowing FMLA leave to negatively affect the AWW would unfairly penalize the claimant for taking personal leave, which contradicts the legislative intent to benefit the employee.

The Court of Appeals clarified that when calculating AWW, any weeks that do not reflect the employees’ customary earnings should be excluded from the 13 weeks of pre-injury wages. The Court further defined “weekly earnings” as the amount the employees would have earned had they worked their customary hours for the full pay period. The Court also noted that the Legislature has determined that personal absences should not diminish the employees’ customary earnings; instead, the employees should be reimbursed for the amount they would have earned had they worked, as other employees in a similar occupation did.

This ruling may have important implications for calculating AWW when an employee has taken FMLA leave prior to an injury. However, the Court also emphasized that the determination of what constitutes customary earnings will depend on the specific facts of each case.

If you have any questions about AWW or any other questions regarding Iowa Workers’ Compensation, please reach out to Paul Barta or Adam Barrett at (402) 475-1075.