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A self-employed Nevada worker should not automatically be denied workers compensation benefits just because the worker did not produce evidence of his salary, the Nevada Supreme Court has ruled.
Dzidefo Mensah was a self-employed delivery driver who worked on one of FedEx's home delivery routes in Reno, Nevada. Under his service contract with the company, he was required to maintain workers comp insurance, which he did through Irvin, California-based CorVel Corp.
Mr. Mensah fell and injured his shoulder while delivering packages in October 2011, so he filed a workers comp claim that was accepted. He received medical treatment and was eventually released to light-duty work, but his physical restrictions left him unable to complete his delivery route so he hired a replacement driver until the service contract was cancelled, according to court records.
He requested temporary disability benefits, which were denied because he continued to receive the same compensation under the FedEx service contract as he did before the injury occurred. Mr. Mensah filed an administrative appeal with the Nevada Department of Administration, Appeals Division. But the appeals officer denied both temporary total disability benefits and temporary partial disability benefits in August 2012 because he did not produce any documentation showing that he had paid himself a salary of $1,425 per week as he claimed and could not determine the difference between his preinjury and post-injury income, records show.
The Second Judicial District Court, Washoe County, Nevada denied Mr. Mensah's petition in July 2013 for judicial review. Mr. Mensah filed his notice of appeal to the Nevada Supreme Court in April 2014.
However, the Nevada Supreme Court ruled Thursday that for self-employed individuals, the lack of a salary associated with typical employment does not necessarily prevent an average monthly wage calculation to determine lost income and render a workers comp benefit decision. Instead, the injured worker's earnings, which include more than just the worker's salary and should take into consideration a self-employed individual's business profits and expenses, are part of the wage determination, the court found.
“It is indisputable that appellant suffered an industrial injury,” the court stated. “This made him eligible to receive temporary disability benefits, calculated based on any loss in wages caused by the injury. The appeals officer concluded that appellant was not entitled to those benefits because his salary could not be established from his personal and corporate income tax filings and he could not produce any paystubs or other evidence of a salary. But appellant was self-employed, and thus, it is reasonable that he did not pay himself a salary in the typical sense.”
The court records showed that Mr. Mensah paid another employee to complete his delivery route during the time that he was medically restricted from doing so, which demonstrated a loss to his business income, the court observed in its ruling.
The Nevada Supreme Court remanded the case back to the District Court with directions to send it back to the appeals officer to determine whether the documents Mr. Mensah submitted adequately demonstrated a wage loss during the time he was on restricted duty, taking into account that wages include more than just a salary.
CorVel could not be immediately reached for comment.
FedEx Corp. drivers in Kansas are employees, not independent contractors, says an appeals court, after consulting with the Kansas Supreme Court on the issue.