Vol. 8, No. 2, Pg. 14. Understanding the New Workers' Compensation Legislation.

• Author: By Alton L. Martin Jr.

South Carolina Lawyer

1996.

Vol. 8, No. 2, Pg. 14.

Understanding the New Workers' Compensation Legislation

14Understanding the New Workers' Compensation LegislationBy Alton L. Martin Jr.Recently, the Governor signed legislation that will cause sweeping changes in workers' compensation practice and procedure. An understanding of this new legislation is necessary for anyone handling a workers' compensation case in South Carolina.

§42-22-40 AVERAGE WEEKLY WAGES

The calculation of average weekly wages, the prerequisite for determining a workers' compensation rate, has long been a point of consternation for many workers' compensation practitioners. The compensation rate is roughly calculated by taking the worker's average weekly wages for the previous 52 weeks and multiplying those wages by two-thirds.

Previously, the process could be extremely time-consuming for an employer, and it sometimes resulted in an inaccurate reflection of the injured employee's true wages. In particular, S.C. Code Ann. § 42-1-40 (1976) provided that each time a worker missed seven consecutive calendar days from work during the previous years, those weeks would be subtracted in calculating the average weekly wages. However, S.C. Code Regs. 67-1603A (Law. Co-op. 1990) required vacation pay and bonuses to be included in average weekly wages. Obviously, this would inaccurately inflate the compensation rate.

The new legislation significantly simplified the method of calculation. Now, average weekly wages are to be calculated:

. . . by taking the total wages paid for the last four quarters immediately preceding the quarter in which the injury occurred as reported to the Employment Security Commission's Employer Contribution Reports divided by fifty-two or the actual number of weeks for which wages were paid, whichever is less.

S.C. Code Ann. § 42-1-40 (amended 1996).

In situations in which a worker has not been employed for 52 weeks prior to the accident, the statute maintains its prior method of calculating for the period of weeks actually worked or imputing an average weekly wage of a comparably situated worker.

§42-1-160 STRESS DEFINED

Ever since the Court of Appeal's holding in Stokes v. First National Bank, 298 S.C. 13, 377 S.E.2d 922 (Ct.App. 1988), nagging questions have persisted regarding the compensability of mental and psychological injuries brought on by job stress. Although no statutory rule existed, the test set out in Stokes and subsequent cases required a claimant to establish that the mental injury was induced either by physical injury or by unusual or extraordinary conditions of employment. Id. at p. 926

As amended, § 42-1-160 establishes a rule for compensability of job stress unaccompanied by physical injury that causes a mental injury. It provides that a mental injury caused by stress "is not a personal injury unless it is established that the stressful employment conditions Causing the mental injury were extraordinary and unusual in comparison to the normal conditions of the employment." (Emphasis added). Although the legislature does not define "extraordinary" or "unusual," it does provide some guidance

16regarding compensability. Specifically, a stress-induced injury: . . . is not considered compensable if it results from any event or series of events which is incidental to normal employer/employee relations including, but not limited to, personnel actions by the employer such as disciplinary actions, work evaluations, transfers, promotions, demotions, salary reviews, or terminations, except when these actions are taken in an extraordinary and unusual manner.

S.C. Code Ann. § 42-1-160 (amended 1996).

OPT-OUT REPEALED

A portion of the new legislation repealed the controversial statutes allowing an employer or employee to voluntarily exempt themselves from coverage of the Workers' Compensation Act (Act), commonly referred to as "opting-out."

Section 42-1-310 and § 42-1-320 remain substantially the same; however, the revised versions delete all references to exceptions allowed pursuant to the "opt-out" sections.

Section 42-1-460 still provides that all contracts for service are "presumed made subject to the provisions" of the Act. However, the new legislation deletes the reference to the allowance of an exception if a specific type of notice is given. Notably, the new...