North Carolina Workers' Compensation - Calculating Average Weekly Wage and Compensation Rate
In North Carolina workers' compensation cases, the correct calculation of the "average weekly wage" or "AWW" and the corresponding "compensation rate" or "CR" is often a disputed issue. Over the years I have found that insurance adjusters in accepted claims sometimes do not calculate these numbers correctly, usually because the employer has not provided the adjuster with full or accurate information about the pre-injury earnings of the injured worker. When we take in a new case, one of the first things we do is verify the correct AWW and CR to make sure our client is getting paid the correct amount.
Here is a quick summary of how to calculate your AWW and CR so that you can verify whether you are getting the correct weekly wage loss amount.
The basic rule for calculating AWW is this: The AWW is the average gross pay you received in your job of injury during the 52 weeks immediately preceding the date of your injury. As an example, if you were hurt on March 31 , 2013, then you need to gather up all your pay stubs from April 1, 2012 through March 31, 2013. Then you add up the gross pay for each pay period and divide the total by the number of weeks covered by those pay periods. If you worked in that job for less than 52 weeks, then you average out your gross pay for the number of weeks that you did work in that job. If you missed working during that period for more than seven (7) consecutive calendar days, then you drop out that period of consecutive days from your average calculation. Here is an illustration:
Date of Injury = March 31, 2013
First Day on the Job = July 1, 2012
Paid Vacation = December 20, 2012 thru January 1, 2013, inclusive of those two days on either end (total of 12 paid days off)
Total gross pay earned from July 1, 2012 through March 31, 2013 = $25,658.00
Total number of calendar days from July 1 to March 31 = 274 days, but you must subtract the 12 days of vacation when you did not work at all, so you end up with 262 days for the purpose of the average calculation. You worked Monday through Friday with weekends off, except for that period of vacation.
$25,658.00 divided by 262 days = $97.93 earned per day, multiplied by 7 days to make a week = $685.52
This number, $685.52, is the "AWW" or average weekly wage.
To determine the compensation rate, multiply that amount by .6667. Here, $685.52 x .6667 = $457.04 This amount, $457.04, is your "Compensation Rate" or "CR."
This CR is the amount you would receive each week as TTD (temporary total disability) wage replacement while you are out of work due to your injury.
I had a case a few years ago in which the adjuster left off over $35,000 in earnings from the calculation. This was because the employer had not reported all of the worker's income to the insurance company. A $35,000 mistake is equal to $448 in weekly benefits!
This was an illustration of the basic calculation. There are additional calculating rules for some truck drivers, volunteer firemen, and for people who have worked at the job for a short time. There are also special rules for people who get hurt immediately after a big raise, and for school teachers and other school employees who do not work in the summer. If you have any questions about calculating your Average Weekly Wage and Compensation Rate, get in touch with us for a free consultation.