As a very difficult year comes to a close, injured workers may be facing the challenge of calculating holiday bonuses into their Average Weekly Wage (AWW). Given the difficult times of 2020, it is more critical than ever that you get paid what you are entitled to because even a minute variation could mean substantially less money in your wallet. Here are some key points to keep in mind.
First, A Math Lesson…
In most cases, workers’ compensation wage loss benefits are calculated by analyzing the gross wages received during the four quarters before the injury happened. To determine your weekly benefit, you divide the total wages for each quarter by 13 weeks. That results in a weekly figure for each quarter. Then you take the average of the three highest quarterly averages. This results in your AWW. If you earned a bonus, you divide that figure by 52 weeks and add it to the AWW. Bonuses, vacation time, board/lodging and gratuities are often forgotten, so it’s vital to double check calculations.
Here is an example:
Assume your injury occurred on March 22, 2020, and you are paid $15 per hour. You are paid time and half for overtime and you are not paid if there is bad weather. Here is the breakdown of your wages during each quarter:
|One||March 22 – June 22, 2019||$8,275.00||$636.54|
|Two||June 23, 2019 – September 22, 2019||$8,472.00||$651.69|
|Three||September 23, 2019 – December 22, 2019||$7,850.00||$603.85|
|Four||December 23, 2019 – March 22, 2020||$7,110.00||$546.92|
The average of the three highest quarters (Quarters 1, 2, and 3) is $630.69.
Your end-of-the-year bonus of $2,500.00 ¸ 52 weeks = $48.08 per week.
$630.69 + $48.08 = $678.77 AWW.
Now, Some Special Circumstances…
Calculating the AWW can get even more complicated with some special circumstances. Here are just a few:
- If you work more than one job, wages from both jobs are used to determine the average weekly wage. In this instance, the average weekly wage for each job is calculated separately.
- If calculating your AWW results in unfair and grossly inaccurate wages, the number can be adjusted to more accurately depict your earnings. One example where this might happen could be if, during one or more of your 13-week periods, you worked part time for a few months then full time thereafter. In this type of situation, the accurate depiction of wages could be based solely on the full-time wages.
- If an employee has not been employed by the time-of-injury employer for four consecutive quarters, the average weekly wage is calculated using the average of wages earned for any completed quarter.
- If you work less than one completed quarter, then you use the “expected” weekly wages. This is often contested.
- Seasonal employees and volunteer emergency workers are treated differently.
There are many nuances when calculating your AWW. Insurance companies notoriously miscalculate benefit rates, resulting in huge underpayments of compensation to the injured worker. A small mistake in the calculation of the AWW can have a drastic long-term affect.
Carefully examine how your employer arrived at the average weekly wage and whether that calculation is. If you feel as though your AWW has been miscalculated, please call my office. Initial consultations are free.