Tag Archives: average weekly wage

Irregular shifts complicate workers’ compensation claims

Today’s post comes from guest author Jon Rehm, from Rehm, Bennett & Moore.

Irregular work hours, driven increasingly by automated scheduling, have lead San Francisco and Seattle to pass municipal ordinances to regulate the practice because irregular schedules make child care, transportation and working multiple jobs increasingly difficult for low wage workers.

Irregular hours also increase the risk of work injury and they can complicate the claims of injured workers.  Here are a few ways irregular working hours can impact a workers’ compensation claim:

Benefit rates

Workers compensation disability benefits are paid based on a workers’ average weekly earnings or their average weekly wage – AWW for short. But when you work 40 hours one week and eight the next, what’s your average work week? Mathematically, in this scenario the average week would be 24 weeks. An insurance company would likely use a simple average.

But under Nebraska law a court is supposed to exclude abnormally low weeks from the calculation of average weekly wage. In other words if the case is pushed into court, a Judge will exclude abnormally low weeks which would lead to a higher benefit rate.

Many employers also pay shift differential where night and weekend shifts get a higher hourly wage. Effective hourly wages can vary from week to week for employees who work irregular shifts that include night and weekend shifts.

Nebraska excludes overtime premium in general from AWW, but shift differential still counts. Sometimes insurance companies will exclude shift differentials from their calculations of average weekly wage. This is particularly true when insurers are calculating permanent disability benefits.

It is also common for workers who work irregular shifts to work less than 40 hours a week. For the sake of permanent disability benefits, Nebraska assumes a minimum of a 40-hour work week . Insurers will often not follow this rule. Irregular shift workers are not the only workers who are subjected to this practice, but when you combine exclusions of shift differential along with not using a 40-hour week, irregular shift workers can get substantially underpaid when it comes to workers compensation.

Our firm, like most other firms, represents injured workers on a contingent fee basis. The problem with that arrangement is that while an under payment of benefits may be a meaningful amount of money to an injured worker, it may not be enough for an attorney to justify taking on an underpayment claim on a contingent fee basis. Most state and federal wage and hour laws allow for fee awards that can be many times the unpaid wages. The reason for attorney fee awards in this case is the important public purpose of these laws.

Workers compensation has the same general purpose of as wage and hour laws, but in Nebraska it is difficult to get attorney fees in a disputed workers compensation case because an award of penalties requries a lack of a reasonable controversy. Conventional wisdom is that employees must show a lack of reasonable controversy to win attorney fees. However, some case law seems to distinguish the standard for winning a penalty versus winning an attorney fee.

Medical appointments

Irregular shifts also make it difficult to schedule medical appointments. This is particularly true of specialists who would be treating a more serious work injury. Missing appointments can be a red flag for judges, doctors and insurers if not explained. A good attorney can help an injured worker explain how an irregular work schedule prevented them or interfere with the. from attending medical appointments.

 

Am I Being Paid Enough?

Today’s post comes from guest author Sam Liverseed, from The Domer Law Firm.

Injured workers commonly ask whether they are being paid the correct amount of workers’ compensation benefits.  The question usually pertains to the weekly lost time benefits paid during while healing after an injury.  It is a question I take seriously as the weekly benefit is crucial to the injured worker and their family.  This blog post outlines how the weekly benefits are calculated.  If an injured worker has questions about benefits, they should reach out to an experienced workers’ compensation attorney. 

The starting point for calculations is the worker’s Average Weekly Wage. Specifically, when an injured worker is under restrictions by a treating physician following an injury and the employer cannot provide work, or when the injured worker is taken off work completely by a physician, the insurance company owes “temporary total disability” (also referred to as “TTD”).  Temporary total disability is paid at 2/3 of the injured worker’s “average weekly wage” (also referred to as “AWW”). 

For most workers, the average weekly wage is calculated in two ways under Wisconsin law, and the injured worker is entitled to the higher of the two calculations: 

  1. Hourly Rate x 40:

    The first option is the employee’s hourly wage at the time of the injury multiplied by the hours regularly scheduled to work (usually, full-time, or 40 hrs/week).  For example, an employee making $10 an hour, who usually works 40 hours a week, has an average weekly wage of $400 ($10 x 40).

    There are additional considerations for this equation.  For example, shift differentials (especially important to those in the medical field) should be considered as should overtime if the injured worker was regularly scheduled to work overtime hours.  Also, if the employee works alternating shifts from week to week, this needs to be taken into account.  If any of these apply, it is a good idea to reach out to an attorney to discuss whether the amount being paid is correct.  In my experience, insurance companies will ignore overtime payments and shift differentials when calculating the average weekly wage, which reduces the amount owed to the injured worker.

  2. Average Earning in the Year Before the Injury.

    The second option is the actual gross earnings during the 52 weeks before the injury divided by the number of weeks worked during that period.  For example, if an employee earned $52,000 in the 52 weeks before the work injury, their average weekly wage is $1,000.  The number of weeks worked includes any weeks the employee was being paid, including paid vacation or paid sick leave.

    In addition, all taxable earnings must be included when calculating the gross earnings, including overtime, incentive pay, profit sharing, and bonuses.  Other things of value, including meals, rooms, utilities, rent remission, may also be part of the gross earnings.

The injured worker receives the higher of the two calculations.  The AWW is an essential to a claim–affecting all other workers’ compensation benefits.  An injured worker should ensure they are paid the correct amount.  The Worker’s Compensation Act is designed to protect the worker and provide these wage loss benefits.  If you are injured and question the amount paid, contact an attorney.