What Is Average Weekly Wage?

Sep 28, 2023 | Benefits

What Is Average Weekly Wage? – In Workers’ Compensation a lot of your benefits, particularly the money benefits, depend upon what your average weekly wage is. The more money you make when you are injured, the more money you will be compensated in general.

One of the benefits when you’re injured on the job is called Temporary Total Disability (TTD) or Temporary Partial Disability (TPD). These are the lost wages while you’re treating and have restrictions, and you’re losing wages because of the work injury. The more you make, the more lost wages you’re going to have.

There are some other benefits that are also dependent on a person’s average weekly wage, an impairment rating for example. So, it’s really important that your average weekly wage is correct.

Average Weekly Wage calculation

The insurance company calculates the average weekly wage, but it might not be as favorable as it could be. They look at the last 12 weeks and divide the total earned by 12 weeks.

Additionally, if you’re on a salary, it might be a simple matter. If you make a thousand dollars a week regardless of how many hours you work, regardless of what’s going on with the business, then calculating your average weekly wage might be very simple. However, there are situations where it’s not.

Situations that impact the Average Weekly Wage

We’ve had clients on seasonal fluctuating work. This means while 12 weeks before their injury they might have been working only 30 hours a week, if we go back further into a time where they would have a higher workload, they might have been working 45 hours during that time. Nonetheless, if you just include 12 weeks it’s going to be a much smaller average weekly wage.

Another example is if someone had to leave work for a vacation or because someone passed away and they needed to take time off to attend the funeral. Then they get injured after they’ve come back, and the insurance adjusters just say to the employer to send the wages for the last 12 weeks, where there’s a week or two where you made zero money. They will still use that and average it in.

There could also be a situation where 5 weeks before your injury you got a raise, so now if they take that average they will use some weeks at a lower wage. In spite of this, now you would be making more money, so an average would be lower than if you adjust it to your new wage.

Importance of a correct calculation

In addition to wages, there are other things that go into the average weekly wage. If you receive benefits, whether it’s health insurance, driving a company car, or receiving housing assistance, all of that also factor in because if you lose the job and you lose the insurance benefits you are due the amount of money that those insurance benefits cost.

In our experience, about 75% of the time we’re able to increase the average weekly wages with our calculations. While it might only be, for example, $30, if the injury was 2 years ago, that $30 increase will go retroactively for that many weeks, so it can make a significant difference in your benefits.