Calculating Lost Wages Benefits

By: Douglas A. Williams

If you are receiving workers’ compensation benefits, you’re likely bringing home less money than you were when you were working. Unfortunately, workers’ compensation is not designed to pay the exact same amount you were earning before your work-related injury. After an injury, the employer or the workers’ compensation insurance carrier calculates the “average weekly wage” or (AWW). This is the average amount that the injured worker was earning at the time of the injury. The injured workers’ compensation rate could be anywhere from 66% – 90% of that AWW depending on how much the worker was earning.

Many injured workers simply assume that the employer or the workers’ compensation insurance carrier has accurately calculated their AWW and compensation rate, but they often make mistakes.

The Workers’ Compensation Act provides for different methods of calculating the AWW based on the manner in which the injured worker’s pay was determined—hourly, salary, or other methods—and how long the injured worker was employed. If the employer or the carrier use the wrong method of calculation, the AWW and corresponding compensation rate may be too low.

Additionally, the employers and/or workers’ compensation insurance carriers are required to include other payments such as the following:

Money received in a profit sharing plan;

Accrued vacation and/or sick pay;

Per diem payments (i.e., payments made to workers who travel to provide money for food and/or lodging);


Supplemental Unemployment Benefits (benefits that are payable under some Collective Bargaining Agreements when a worker receives unemployment), and;

Concurrent employment (money earned from a second job at which the injured worker was employed at the time of the injury).

Employers or insurance carriers often neglect to include benefits such as these in the calculation of the AWW. When this happens, the injured worker receives less than they should in weekly compensation benefits. If you believe that you’re receiving less than you should, call us and we will be happy to review your case. If appropriate, we will file the necessary petition to compel the employer or carrier to pay you the full amount of benefits you earned.



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