In Hargon, the claimant was a retired military intelligence member of the United States Army.
The claimant began work as a contract intelligence analyst, performing short-term contracts for various employers, including Respondent-Employer, for durations of approximately two to three weeks at a time. The claimant suffered a work injury in February 2024 while working with Respondent-Employer. Respondent-Employer admitted to an average weekly wage (“AWW”) of $123.10 initially, before later amending the admission of liability to reflect an AWW of $382.65 as calculated based on the claimant’s pre-injury earnings from another employer, CSA Global, LLC.
The claimant contested the admitted AWW, arguing that the admitted rate failed to fully capture her lost earnings. The claimant’s 2023 W-2 forms showed that she had gross earnings of $19,952.44, based on the combined wages earned with Respondent-Employer and CSA.
The claimant testified that her earnings were historically higher in even-numbered years, though this pattern did not hold in 2022 as Russia’s invasion of Ukraine had compromised her ability to work.
The claimant also testified that she anticipated working more intelligence projects in 2024 and also expected to work as a county election judge in 2024. Respondent-Employer argued that the claimant’s AWW should be calculated by taking her gross wages of $19,952.44, divided by fifty-two weeks. The ALJ issued an order denying the claimant’s request for an increased AWW and agreeing with Respondent-Employer, citing section 8-42-102(2), C.R.S. 2025. The claimant appealed this decision to the Industrial Claims Appeals Office (the Panel), which affirmed the ALJ’s order.
The Colorado Court of Appeals (the Court) heard this issue on appeal, noting that the Panel’s decision may be set aside when the denial of benefits isn’t supported by applicable law. Calculation of AWW is determined under subsections (2) and (3) of C.R.S. § 8-42-102. Subsection (2) has been described as “the default provision” by the Colorado Supreme Court in Avalanche Indus., Inc. v. Clark. 198 P.3d 589, 592 (2008). The default provision states that the ALJ shall calculate AWW based “upon the monthly, weekly, daily, hourly, or other remuneration” received by the claimant “at the time of the injury”. §8-42-102(2).
Paragraph (e) of subsection (2) applies when an employee is compensated for production output rather than time spent working and states as follows:
“Where the employee is paid on a piecework, tonnage, commission, or basis other than a monthly, weekly, daily, or hourly wage and where the employment is but casual and in the usual course of the trade, business, profession, or occupation of his employer, the total amount earned by the injured or killed employee in the twelve months preceding the injury shall be computed, which sum shall be divided by the number of pay periods the injured person was employed during the twelve months immediately preceding the injury, and the result thus ascertained shall be considered the average wage of said employee per pay period.”
Subsection (3) of §8-42-102, also known as the discretionary exception, “applies when, due to the nature of the employee’s work (among other possible reasons), the computation methods prescribed in the default provision ‘will not fairly compute the average weekly wage.’ §8-42-102(3).” Hargon v. Indus. Claim Appeals Office, No. 25CA0977 ¶10 (Colo Ct. App. 2026). When applying the discretionary exception to calculating AWW, the ALJ is given broad discretion to “compute the average weekly wage in such other manner and by such method as will . . . fairly determine such employee’s average weekly wage.” C.R.S. §8-42-102(3). in this claim, the ALJ ruled for the Respondent-Employer, applying the default provision in calculating the AWW by dividing the claimant’s gross wages earned in 2023 by 52 weeks. The ALJ’s order stated that “the default provision provides a fair approximation of [Claimant’s] wage loss and diminished earning capacity.”
The claimant argued that the ALJ’s order should not have been affirmed given the misapplication of the default provision. The Court highlighted that paragraph (e) of subsection (2) should only be applied when the claimant’s productivity determines their renumeration, not where the claimant receives pay on an hourly basis during periods covered by multiple short-term contracts. The default provision of subsection (2) does not contain a computation method that sufficiently covered the claimant’s unique remuneration scenario.
Because the ALJ only considered the claimant’s 2023 earning history in computing a fair AWW, the Court found that the ALJ did not exercise broad discretion as allowed under the discretionary exception. The Court set aside the Panel’s order and remanded the case to the Panel with instructions to remand this claim to the ALJ to determine the claimant’s AWW under the discretionary exception.
Hargon v. Indus. Claim Appeals Office, No. 25CA0977 (Colo. Ct. App. 2026).
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