Court of Appeals Decides Rate Case Favorably to Claimant

In Mercy Medical Center v. Healy, No. 1-338 (Iowa App. June 29, 2011), the court decided a rate issue concerning the use of paid sick and vacation time.  Claimant was hired to work 35 hours a week for Mercy Medical Center in Dubuque, but seldom worked this many hours, due to illnesses and vacations.  Under the terms of her employment, she was paid for the vacation and sick time, and the commissioner found that because she was hired to work 35 hours a week, these were her customary hours.  The rate was accordingly based on a 35 hour weeks at claimant's rate of pay.

The district court reversed on the rate issue, finding that since claimant never (or seldom) actually worked 35 hours per week, a rate based on these hours of work was not customary.  The district court found that the hours "actually worked" were the touchstone for the rate calculation rather than the wages received by the employee. 

The court found that the language of section 85.36 (specifically the language that the "weekly earnings" for the "customary hours for the full period") contradicted the district court's finding that the hours actually worked were what should have been considered.  The words of the statute do not refer to the hours actually worked, but to the earnings that would have been made had the employee worked the regular hours required by the employer.  In this case, that was 35 hours, and accordingly, the rate was appropriately based on this figure.  The commissioner's interpretation was found to be consistent with the language of the statute and the spirit of the workers' compensation chapter.  The court specifically found that vacation and sick leave payments were not automatically excluded from the rate calculation by the statute.  Rather, sick and vacation payments may be excluded if for unrepresentative weeks.