Gradunov: A $45 Hourly Rate, Not Thin Payroll Records, Set Temporary Disability at $1,200 a Week

When a worker’s hourly rate and the employer’s payroll records tell different stories, the hourly rate can control the temporary disability calculation if the job was full time and the payroll is unreliable. In Vitalie Gradunov v. Charles Hope Construction, No. ADJ22231572 (WCAB Oct. 30, 2026), a three-member Appeals Board panel granted a self-represented machine operator’s petition for reconsideration and raised his average weekly earnings from $894.71 to $1,800, which lifts his temporary disability rate from $596.47 to $1,200 a week. The result rests on this record: a $45 hourly rate for a 40-hour week, and wage documents that left out cash pay and unpaid overtime.

One issue at trial: the temporary disability rate

Gradunov injured his left hand and both wrists on April 29, 2025, while working for Charles Hope Construction, insured by State Compensation Insurance Fund. At the March 23, 2026 trial, the only listed issue was “the appropriate rate of temporary disability.”

The presiding judge found that “applicant was not full time” and that he earned $46,525 in the 52 weeks before the injury. Dividing by 52 gave $894.71. The judge used the earning-capacity method in Labor Code section 4453(c)(4), citing the intermittent nature of the job and multiple employments. Gradunov asked for $1,800 a week, $45 an hour for 40 hours. SCIF filed no answer, and the judge’s report recommended denial.

The hiring terms pointed to $1,800 a week

Section 4453(c) offers four ways to compute average weekly earnings. The Board found that, given the mixed earnings evidence, “it is necessary to consider all four methods before an earnings determination may be made.” The judge had relied on the fourth.

The first method, section 4453(c)(1), applies to work of 30 or more hours over five or more days a week: daily earnings times working days. Four pieces of evidence pointed the same way. SCIF’s May 8, 2025 benefit notice said, “Your weekly compensation rate is $1200.00 based on your earnings of $1800.00 per week.” SCIF’s wage information form, which the employer completed and signed under a section 4906(h) declaration, listed $45 an hour for 40 hours a week. The employer’s job-description form showed 8-hour days and 40-hour weeks. Gradunov testified that he was paid $45 an hour. Five days at $360 a day gave $1,800 a week. The Board then asked whether any other method should displace that figure.

“1099” payments did not create a second job

Section 4453(c)(2) combines earnings from two or more employers. Some of Gradunov’s pay came as 1099 payments for work on the employer’s own projects, which hinted at self-employment.

The Board applied the ABC test in Labor Code section 2775, which governs workers’ compensation injuries after July 1, 2020, together with the presumption of employment in section 3357. The employer had to prove all three conditions to show independent-contractor status. It failed the first: nothing showed Gradunov was free of the employer’s control. The employer moved him to indoor work in bad weather and testified that he “wanted the applicant to be on payroll the whole time, but he didn’t want to be.” The Board concluded that the use of 1099 payments “was a fiction and that applicant was working for the employer as an employee even when receiving such payments.” With one employer, section 4453(c)(2) did not apply.

On-call boxes on a form did not make the work irregular

Section 4453(c)(3) averages actual earnings when pay comes at an irregular rate, such as piecework or commission. The employer’s wage form checked “temporary,” “seasonal,” “on-call” and “part-time,” and said the job ended August 8, 2025. At trial the employer described much of the work as piecemeal.

The rest of the record cut the other way. The employer testified that he tried to get Gradunov as much work as he could and that the jobs were still not finished. An October 2025 letter signed by both men said the end of one job was never meant to end the employment; the employer said its purpose was to ease the concern of Gradunov’s wife about his employment. Gradunov testified there were always projects, indoors when weather stopped outdoor work. The Board found Gradunov “was hired with the expectation of full-time continuous work,” and that work remained available through trial. Section 4453(c)(3) did not apply.

Why the earning-capacity method did not fit this record

Section 4453(c)(4) uses earning capacity when the job is under 30 hours a week or the other methods cannot reasonably and fairly be applied. Drawing on Goytia v. Workers’ Comp. Appeals Bd. (1970) 1 Cal.3d 889 and later cases, the Board described a balance between the hourly rate and earning capacity, and added that the method “should not be used to reduce temporary disability benefits when loss of earnings was not reflective of applicant’s training, experience, and willingness to work.”

The Board tested two reasons to use the fourth method. First, weather. The February 2025 atmospheric-river storm came before the injury, and the Board called the effect of such storms on future work speculative without reasonably probable evidence. Weather affected the employer’s business, not Gradunov’s earnings.

Second, the payroll. Both men testified to cash payments that appear in no record. The 2025 W-2 and payroll ledger each showed $9,697.50, and the 1099 detail showed $4,012.50, all by check, so the Board found “the documentation likely under-reports applicant’s earnings.” Gradunov’s uncontradicted testimony was that hours over eight a day were banked rather than paid as overtime, which the Board said undervalued his earning capacity under Labor Code sections 510(a) and 1194(a). The Board pointed to SCIF’s September 5, 2025 notice, which cut average weekly earnings to $227.64 on the employer’s report of intermittent work, as “[e]mblematic of the possible swings in benefit calculations” under the fourth method.

Its conclusion: there was “no reliable or substantial evidence that supports the use of the alternative” earning-capacity method, so section 4453(c)(1) controlled.

The Board did not consider four documents Gradunov attached as newly discovered evidence, because he had them before trial (WCAB Rule 10945(c)(2)). His fraud allegation was not a trial issue and was not addressed.

The amended award and what remains for the parties

The panel granted reconsideration and amended the May 22, 2026 findings to set temporary disability at $1,200 a week on average weekly earnings of $1,800. The rest of the award stands. The award runs against SCIF “for period or periods to be adjusted by the parties, less credit for sums paid previous,” with the presiding judge keeping jurisdiction over disputes. The decision fixes the rate; the parties still have to work out the periods and the credit for past payments.

Our reading: Gradunov helps a worker whose employer’s payroll understates what the job paid. The documents that carried the case were the insurer’s first benefit notice, the employer-signed wage form and job description, and consistent testimony about cash pay and banked overtime. A worker who truly worked part time, or had other employers, faces a different calculation. When a rate correction like this one leaves past benefits underpaid, our guide to late workers’ comp checks explains the late-payment increase and penalty rules, including how a penalty can be lost if it is not raised at trial.