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What is my average weekly wage?

Riddle Brantley LLP   |  January 19, 2015   |  

A proper and accurate calculation of average weekly wage is crucial in a worker’s compensation claim, since all compensation paid to an injured worker derives from this calculation. The intent of the Workers’ Compensation Act is to determine a wage that would be fair and just to both the employer and the employee. With this in mind, the Workers’ Compensation Act provides five methods which can be used to calculate an injured workers’ average weekly wage.

The first method is used if an employee has worked for an employer for 52 weeks before the injury. Under this method, the gross earnings in the 52 weeks prior to the injury are divided by the actual weeks worked. If the employee worked every week, then the total earnings would be divided by 52 to reach an average weekly wage. If, however, during this 52 week period the employee missed more than seven consecutive days on one or more occasions, then the number of days missed for each period is deduced from the 365 day period. Gross wages are then divided by this number of days actually worked to reach a daily rate. Using this daily rate, an average weekly wage can be obtained by simply multiplying the daily rate by 7.

The second method is used where employment is less than 52 weeks prior to the injury. This method is similar in that you divided the earnings during the period worked prior to the injury by the number of weeks or parts thereof where wages were earned. This method will be used so long as it provides a fair and just result to both parties.

The third method is used when it is impractical to compute the average weekly wage using the first or second method due to the shortness of the period of employment or due to the casual nature of the employment. In this situation, the Industrial Commission will consider the average weekly wage of a person of the same grade and character employed in the same class of employment in the same locality or community during the 52 weeks prior to the date of injury.

The fourth method is a catch-all which is only used where exceptional circumstances exist that would make the previous methods of computation unfair, either to the employer or the employee. Under this method, other methods of computing the average weekly wage may be resorted to so long as they most more than approximate the amount which the injured employee would be earning were it not for the injury.

The last method only applies to volunteer firemen, members of rescue squads and other civil service members. Under this method, compensation is calculated upon the average weekly wage based on the earnings of their primary employment rather than from the organization which they were working at the time of the injury or death. This section contemplates that these service members will have multiple employments.

It is important to note that under all of these methods there are some general considerations. First, wages are generally calculated by using the actual gross earnings of the injury worker, rather than net earnings or earning capacity. Gross wages can include things other than salary or hourly compensation. Allowances for room and board, lodging, travel, or an employer provided vehicle can be calculated into gross earnings as well as many other benefits. Second, income from other employment is generally not included in determining average weekly wage. As a result, if you work two jobs and are injured at one, then your average weekly wage may only be based on the earnings from the job at which you were injured.