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Why does Average Weekly Wage matter?

How can two injured workers with the same percentage of disability receive different settlements or awards? One explanation is that the two workers may have different average weekly wages.


Benefits under the Workers’ Compensation Act has many components, but none more complex and ever-changing than average weekly wage (AWW). The AWW is the gross earnings for the 52 weeks prior to the injury. If you earned $52,000 in the year preceding the injury, your AWW would be $1,000.00. It sounds pretty simple, but there are complicating factors.


First, what should be included in wages? Sometimes bonuses and overtime are included, but sometimes they are not. Generally speaking, for overtime to be included it must be mandatory, consistent, or part of regular number of hours worked. Second, what if the claimant worked less than 52 weeks in the year preceeding the injury? Typically, the amount of wages are then divided by the actual number of weeks and days that were worked. In other words, if you earned $52,000, but only worked 40 of the 52 weeks, then the AWW would be $1,300.00.


Why does this really matter?

It is important because AWW determines a number of disability benefits. For example, temporary total disability (TTD), the amount you are paid while off work due to an injury, is 2/3 of your AWW. If your AWW is $500.00 or $1,000.00 that means your TTD could either be $333.33 or $666.67. That’s a difference of $333.34 per week, which can be quite substantial.


The AWW also affects the value of permanent partial disability settlements or awards. For instance, say you have two injured workers with the same injury resulting in 30% loss of use to an arm. One, has an AWW of $500.00 and the other has an AWW of $1,000.00. The settlement amount for the first worker will be $22,770.00, while the same settlement for the second worker will be $45,540.00.


These are only a couple of factors taken into account when calculating AWW. The best way to ensure that you receive the proper benefits is to contact an attorney who is well-versed in workers' compensation law. Call James M. Ridge & Associates, we’d be glad to help.


How can two injured workers with the same percentage of disability receive different settlements or awards? One explanation is that the two workers may have different average weekly wages.


Benefits under the Workers’ Compensation Act has many components, but none more complex and ever-changing than average weekly wage (AWW). The AWW is the gross earnings for the 52 weeks prior to the injury. If you earned $52,000 in the year preceding the injury, your AWW would be $1,000.00. It sounds pretty simple, but there are complicating factors.


First, what should be included in wages? Sometimes bonuses and overtime are included, but sometimes they are not. Generally speaking, for overtime to be included it must be mandatory, consistent, or part of regular number of hours worked. Second, what if the claimant worked less than 52 weeks in the year preceeding the injury? Typically, the amount of wages are then divided by the actual number of weeks and days that were worked. In other words, if you earned $52,000, but only worked 40 of the 52 weeks, then the AWW would be $1,300.00.



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