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Wages: Harder to define then you might think!

In a case with a truly bizarre set of facts, the Judge of compensation had to decide on an issue of what exactly should count as wages, in a claim where the ’employee’ was obviously trying to ‘game the system.’

Some facts: the claimant, Richard Holle was a funeral director who was injured at work in 1985, getting an award of 60% partial total (remember: 75% of partial total is deemed ‘totally disabled’ in New Jersey). Over the next 13 years he succeeded in having this finding of disability increased from 60% to 65% and then ‘totally disabled.’

The issue before the court: was the claimant working for the respondent at the time he was deemed ‘totally disabled’, and if so, how would his wages be computed? This was a huge question because the claimant “sold the business’ to family members under an “installment contract” that paid the claimant fixed sums for twenty years – and that in return, the claimant continued to act as a funeral director at the funeral home, meeting clients, residing on the premises, holding a state funeral license, and assisting in making funeral arrangements.

If the claimant was indeed working (as the comp Judge found he was) then the claimant would only be due $5 per week for ‘permanent, total disability.’ This is due to a ‘quirk’ in the New jersey law which states that if a claimant can earn wages that exceed the wages he earned at the time he was injured, then the employer must pay only $5 per week to the claimant until such time as the claimant’s wages fall below his pre-injury earnings.

In this case, the claimant’s pre-injury earnings (in 1985) were MUCH LESS than his income under his ‘installment contract.’ This means that the Comp Judge’s ruling – that the ‘installment contract’ is really the equivalent of wages given what the claimant is actually doing for the funeral home – would entitle the petitioner to only $5 a week in compensation.

The Appellate Division screwed this one up – finding that the Comp Judge needed to make “further findings . . . as to whether petitioner’s receipt of payments under the installment contract can qualify as wages or earnings.”

Case: Richard J. Holle v. Jacob A. Holle Funeral Home, A-3632-08T2 (App. Div., decided November 5, 2009).

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