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State ex rel. Richards v. Indus. Comm.3/28/1996
CLOSE, Judge.
Relator, Robert Richards, brings this action requesting that we issue a writ of mandamus ordering respondent, Industrial Commission of Ohio ("commission"), to vacate its order regarding the amount of relator's wage loss compensation, and to issue an order increasing the amount of the award.
This matter was referred to a magistrate of this court pursuant to Civ.R. 53(C) and Section 13, Loc.R. 11 of the Tenth District Court of Appeals. The magistratsissued a decision, including findings of fact and conclusions of law, denying relator's request for a writ of mandamus. Relator subsequently filed objections to the decision. Upon examination of the decision, an independent review of the evidence, and due consideration of the objections, this court rejects the decision of the magistrate and orders the commission to compute relator's wage loss compensation by deducting "ordinary and necessary" business expenses from his gross income.
Relator sustained an injury in the course of his employment for which he was awarded temporary total disability. Relator did not return to his former employment, but began his own business of selling and installing garage doors. Relator suffered a wage loss and, subsequently, applied for and was awarded wage loss compensation. The Administrator of the Bureau of Workers' Compensation ("BWC") calculated relator's wage loss by using the gross income from relator's federal income tax return. Relator's gross income for 1993 was $19,882, while his adjusted gross income for that year was $10,287. Relator filed a motion alleging that the BWC improperly used the gross income figure from which to compute his wage loss compensation. A district hearing officer affirmed the administrator's computation; subsequently, a staff hearing officer affirmed the order of the district hearing officer. The commission refused relator's further appeal and his application for reconsideration.
Upon appeal, the magistrate affirmed the commission's order, stating that this method of calculation treats all claimants the same, regardless of whether they are self-employed. In the magistrate's analysis, if gross income were the base for computation preinjury, then it would be appropriate for the base to be gross income postinjury.
While this computation works well for claimants who are employed by another, it penalizes the claimant who is self-employed because the pre- and postinjury scenarios are different. Preinjury, relator was an employee, with income attributable to him only as a reward for his labor, not from the gross revenue of his employer. Postinjury, relator was the employer, with the gross revenue of his business attributed to him. However, relator had no more access to the gross revenues of his business than he did to the gross revenues of his previous employer. Relator used a large portion of that gross revenue to pay the expenses incurred in conducting his business. A claimant/employee bears none of the expense of the business. Therefore, relator is not being treated equally with all other claimants. Relator's real income, or his "wage" from the business, is the net income from his operation.
The only "authority" upon which the commission relies for its use of "gross income" in the computation of average weekly wage is from a March 12, 1993 letter from Edward Kozarevic, Akron District Director, quoting from BWC'sinternal guidelines for computation of wage loss of a self-employed individual, which reads:
"* * * While these individuals are encouraged to take advantage of all of the federal, state, and local business deductions allowed, their `gross' monthly income will be the income W
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