Court Reaffirms That Concurrent Income Gained From Independent Contractor Services is Not Included in Average Monthly Wage Calculation

Muñoz v. Industrial Commission, Court of Appeals, Division Two, Published Opinion, Filed 1/10/14.

Muñoz injured her shoulder working part time for Sonic. Her average monthly wage was set at $1,570.68, which included wages from Sonic and her concurrent earnings from a home improvement store. Muñoz protested, claiming earnings from her horse training and rehabilitation business should have been included. At the time of her injury, she merely had “contracts” for training and rehab; she had yet to perform or be paid for those services. The ALJ concluded (1) the horse contracts were “prospective income” and could not be included and (2) the prospective earnings were as an independent contractor to horse owners and were not subject to the Workers’ Compensation Act.

The Court of Appeals analyzed the relationship of Muñoz to the horse owners and concluded she was an independent contractor rather than an employee looking at the various indicia of control outlined in Home v Industrial Comm’n. Therefore, consistent with earlier court decisions, her earnings could not be included. At oral argument, Muñoz argued that she was a “sole proprietor” and sole proprietors may be covered. The court noted that while sole proprietors “may” be covered, she produced no evidence that she applied for or obtained coverage for her business. Because the Court decided she was an independent contractor, it never addressed the more complicated issue of “prospective earnings.”

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