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Average weekly wages can include corporate profits for comp calculation

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Corporate profits due to an injured worker as a shareholder in his company can be used to calculate his average weekly wages for workers compensation benefits, a Florida appellate court has ruled.

Kenneth Keller was CEO and an electrician at Plant City, Fla.-based K-C Electric Co., and he owned 60% of the company, according to court records. He suffered a severe head injury at work in 2011, leaving him without eyesight and in need of 24/7 attendant care.

Selinda Walden, Mr. Keller’s wife and the secretary of K-C Electric Co., said the company’s profits resulted mostly from Mr. Keller’s work, court records show. An accountant testified that Mr. Keller reported $18,358 in wages on his 2011 tax statement and $49,178 in net income that year from his portion of K-C Electric’s profits.

K-C’s workers comp insurer, Bridgefield Employers Insurance Co., argued that Mr. Keller’s workers comp indemnity benefits should be based on his annual wages, which equaled about $250 a week, rather than his total wages and pro-rata company profits, which equaled $1,250 weekly, records show.

A Florida workers comp judge ruled in Mr. Keller’s favor, even though his company profits were typically paid in an annual bonus and he did not receive his 2011 profits prior to his work injury.

A three-judge panel of Florida’s 1st District Court of Appeal unanimously upheld the earlier ruling on Monday. The court found that Florida law requires comp benefits to be based on any income earned “almost entirely (by) the direct result of personal management and endeavor.”