The Ohio Court of Appeals ruled on July 14, 2026, in the case of State ex rel. Joseph Parente v. Industrial Commission of Ohio (No. 24AP-652). The court addressed a dispute regarding the calculation of Joseph Parente's average weekly wage (AWW) following a workplace injury. This ruling has implications for self-employed individuals and how their income is calculated for workers' compensation purposes.
Joseph Parente, the sole employee and owner of Parente Homes, Inc., sustained a work-related injury on June 3, 2021. After the Ohio Bureau of Workers' Compensation (BWC) initially set his AWW at $765.53, Parente sought to have it increased to $2,582.73. He argued that both his W-2 salary and income reported on a Schedule K-1 should be included in the calculation. The BWC denied his request, stating that the Schedule K-1 earnings were not applicable under their policy.
The case reached the Ohio Court of Appeals after Parente filed a writ of mandamus, seeking to compel the Industrial Commission of Ohio to include his Schedule K-1 earnings in his AWW calculation. The primary dispute centered around whether the commission had a legal obligation to consider these earnings as part of Parente's wages.
In the court's decision, Judge Edelstein noted that the magistrate had determined Parente did not have a clear legal right to include his Schedule K-1 earnings in the AWW calculation. The magistrate had concluded that the commission did not abuse its discretion by excluding these earnings based on BWC Administrator Policy #CP-23-01, which directs that income from S corporations reported on Schedule E is excluded from wage calculations.
The court found that the commission's reliance on the BWC policy was not sufficient. Judge Edelstein stated, "The commission neglected its clear legal duty to calculate Mr. Parente’s AWW in a manner that does him substantial justice." The court emphasized that the AWW should approximate the average amount Parente would have received had he continued working, thus requiring a more individualized assessment of his earnings.
The ruling granted Parente's writ of mandamus, vacating the commission's previous order and remanding the case for further proceedings. The court instructed the commission to consider the unique aspects of Parente's compensation structure as both the owner and employee of his business.
This decision could significantly impact how self-employed individuals calculate their wages for workers' compensation claims. It sets a precedent that the commission must consider unique circumstances when determining AWW, rather than strictly adhering to existing policies that may not account for individual situations.
Moving forward, the Industrial Commission of Ohio may need to reevaluate how it applies its policies in cases involving self-employed individuals. This ruling opens the door for other claimants in similar situations to argue for a more inclusive calculation of their wages.
As for what’s next, the case has been remanded to the commission for further consideration. It remains to be seen how the commission will respond to the court's directive and whether Parente or other claimants will pursue further legal action based on the outcome of this case.