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:
- 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.
- 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.