Owen M. Henderson v. Department Of Labor And Industries
73561-6
Wash. Ct. App. UJan 17, 2017Background
- In 1991 Owen M. Henderson injured his shoulder at work and has received allowed Washington workers' compensation benefits since then.
- In 2011 the SSA notified the state Department of Labor & Industries (the Department) that Henderson would receive Social Security retirement of $1,203/month beginning April 2011.
- The Department initially issued an offset order in June 2011, then canceled it after Henderson said he would waive SSA benefits; Henderson later rescinded that waiver but did not inform the Department and began receiving SSA payments.
- Once notified Henderson was receiving SSA, the Department issued a March 2012 order reducing his workers’ compensation by the SSA payment (new WC rate $2,725.96) after calculating the alternative offset under 42 U.S.C. § 424a(a).
- Henderson appealed, arguing the Department should have used Washington’s Title 51 wage definition (or his IRS 1099 amount) to compute "average current earnings" rather than the Social Security Act definition; administrative bodies and the superior court rejected him.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper method to calculate Social Security offset for WC benefits | Henderson: average current earnings should be measured by Title 51 wage definition (or IRS 1099 income), not SSA's definition | Department: RCW 51.32.220/.225 require calculating the offset using the Social Security Act's "average current earnings" | Court: RCW requires use of the Social Security Act definition; Department complied and calculation was correct |
| Use of 1989 earnings statement v. 1099 | Henderson: Department should have used higher 1099 nonemployee compensation figure | Department: SSA earnings statement reflects FICA-taxed earnings which define "average current earnings"; 1099 included amounts not subject to FICA | Court: SSA earnings statement was proper; 1099 insufficient to show FICA wages |
| Department authority to implement offset absent formal rulemaking | Henderson: Department lacked authority because it had not issued rules/procedures | Department: Statutes direct it to follow 42 U.S.C. § 424a procedures; using internal deskbook/desk procedures is adequate | Court: No additional rulemaking required; statute prescribes the method and the Department followed it |
| Effect of Department's June 2011 cancellation of offset order | Henderson: cancellation established his right to keep both benefits | Department: July 2011 notice merely canceled that order based on Henderson's waiver representations and did not bar future offset if waiver rescinded | Court: Cancellation did not preclude issuing a later offset once Henderson rescinded waiver and received SSA benefits |
Key Cases Cited
- Birgen v. Dep't of Labor & Industries, 186 Wn. App. 851 (offset must be calculated using Social Security Act's definition of average current earnings)
- Frazier v. Dep't of Labor & Industries, 101 Wn. App. 411 (discussion of reverse offset and state enabling legislation)
- Ravsten v. Dep't of Labor & Industries, 108 Wn.2d 143 (purpose: avoid overlapping benefits while fully compensating disabled persons)
- Fuoate v. Comm'r of Soc. Sec., 776 F.3d 389 ("average current earnings" tied to FICA-taxed earnings)
- Seoich v. Dep't of Labor & Industries, 75 Wn.2d 312 (preservation requirement for administrative hearing errors)