It is important to calculate your average weekly wage – your earnings from employment – accurately because this is the number used to calculate your compensation rate which is the money you will be paid while you are out of work and / or for any permanent disability you may have.
#1 My average weekly wage does not include overtime.
Not true. Your overtime wages do count when your average weekly wage is computed. The idea is to get an accurate picture of what the employer has paid over the past year because your benefits will be based on that average for the life of the claim. The law in North Carolina says the carrier must pay you two-thirds of your average weekly earnings.
If you are accustomed to working overtime, you are entitled to count the overtime earnings in the calculation of your average weekly wage. If the benefits you receive from workers’ compensation are going to adequately serve as wage replacement, then overtime must be factored in.
If you are paid per diem in lieu of wages, you can claim the per diem as part of your earnings. This is a complicated area of law which may require the assistance of a Board Certified workers’ compensation attorney.
#2 My average weekly wage is based on net, not gross income.
The truth is your average weekly wage is just that – an average of what you earned in the 52 weeks before your injury. To get that average, your employer is required to fill out a chart, called a Form 22, showing how much you grossed each month in the year before you were hurt.
More importantly, the Form 22 must indicate the days on which you worked. When the average weekly wage is calculated, the weeks in which you did not work and were not paid will not be included in the calculation of the average weekly wage.
#3 My average weekly wage is what I was making the day I got hurt.
Wrong – but also right. To determine what your workers’ compensation payments will be, the law says we must look back an entire year from the date of your accident – not just the day of the accident. This may seem harsh – particularly if you got a big raise right before the accident caused you to be injured. It can also work to your favor if your wages were decreased right before the injury.
Calculating your earnings over a period of time gives a more accurate average of your wage earning capacity than looking at your pay on any particular day. Averaging earnings over one year is an attempt to be fair to both the employee and the employer.
#4 My comp benefits will increase with the cost of living.
Unfortunately no. There is no cost-of-living increase provided in the law for workers’ compensation claims. It may seem unfair that once you become unable to work, your workers’ compensation benefits are fixed and remain the same for the duration of your claim.
#5 I get to pick the wage calculation that is most fair to me.
That’s not exactly what the law says. There are five methods for computing average weekly wage outlined in the Workers’ Compensation Act. Importantly, the list is set out in order of succession. In other words, the first method – averaging the earnings over the prior 52 weeks – must be used unless it cannot be used, in which case the second method is used, and so on. The fifth method, which calls for the use of the calculation method that is most fair to all parties, is either arrived at by agreement between the parties or by order of the Industrial Commission.
If you believe that you are not being paid accurately, you should ask how your average weekly wage was calculated. If you are unable to get this information, you should contact an attorney for further assistance.