
The average monthly wage should reflect the injured worker’s actual monthly earning capacity.
In Douglas, the applicant, a nurse, was injured on December 17, 2021. The respondent parties calculated the applicant’s average monthly wage at the time of the injury by taking her total earnings from January 1 through December 15, 2021, and dividing it by the number of days in the period to obtain her daily earnings, which was the basis to calculate her average monthly wage. This total was approved by the Industrial Commission of Arizona (ICA). The applicant challenged this calculation, asserting that her average monthly wage should be the 2021 statutory maximum.
The applicant worked for the employer since 2011. For most of her employment, she worked full-time as a licensed practical nurse (“LPN”). In August 2020, she returned to nursing school, and her employment status with the employer changed to “part time or as needed” at an hourly rate of $32.96. On October 30, 2021, she became licensed as a registered nurse (“RN”), and her employment status changed to full time at an hourly rate of $36. The employer’s minimum hour requirement for full-time employment was 32 hours per week, but nurses could work more than that.

Additionally, the applicant worked fewer hours than the minimum in November 2021, with permission from the employer, for personal reasons. On December 1, 2021, she returned to full-time hours, approximately 16 days before the incident occurred.
At hearing, the ALJ concluded that using the pay records from January 1 through December 15, 2021, constituted the most reasonable basis upon which to establish the applicant’s average monthly wage. The applicant appealed.
The Court concluded that the record lacked evidence showing that the ALJ’s chosen timeframe for calculating the applicant’s average monthly wage reasonably reflected her actual monthly earning capacity. Additionally, the Court emphasized that her employment status from LPN/part time to RN/full time affected both her hourly rate and the number of hours she could expect to work, so basing the calculation on a time when she worked fewer hours at a lower rate would “grossly distort [her] ‘actual earning capacity.’” (emphasis in original). The Court set aside the award.
Douglas v. Indus. Comm'n of Arizona, No. 1 CA-IC 24-0034, 2025 WL 2453105 (Ariz. Ct. App. Aug. 26, 2025).
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