How Does the Insurance Company Calculate My Workers’ Compensation Benefit Rate?
A workers’ compensation benefit rate is based on an injured worker’s average weekly wage (AWW) at the time of the work injury. In Pennsylvania, wage loss benefits are generally calculated using a percentage of the worker’s pre-injury earnings, including certain overtime and concurrent employment income when applicable.
Why Your Workers’ Compensation Benefit Rate Matters
Your workers’ compensation benefit rate determines how much you receive in weekly wage-loss benefits if you’re unable to work because of a job-related injury.
It can also have a significant impact on the value of a potential workers’ compensation settlement.
Because even a small error can result in lost benefits, it is important to make sure the insurance company calculated your rate correctly.
What Is an Average Weekly Wage (AWW)?
Your Average Weekly Wage (AWW) is the number used to calculate your workers’ compensation benefits.
Pennsylvania workers’ compensation benefits are based on your gross earnings before taxes and deductions. The goal is to create a fair representation of what you were earning before your work injury occurred.
How Is Average Weekly Wage Calculated in Pennsylvania?
The calculation depends on your employment history before the injury.
Employees Who Worked More Than One Year
If you worked for your employer for at least four completed 13-week periods before the injury, your Average Weekly Wage is generally based on your highest three of the last four completed 13-week periods.
Employees Who Worked Less Than One Year
If you worked less than a year, Pennsylvania law uses your completed earnings periods to determine a fair average.
Recently Hired Employees
If you were injured shortly after being hired, your Average Weekly Wage may be based on your hourly rate and the number of hours you were expected to work each week.
Does Overtime Count Toward Workers’ Compensation Benefits?
Often, yes. Overtime earnings are frequently included when calculating your Average Weekly Wage. Because of this, workers who regularly worked overtime may be entitled to a higher compensation rate.
Can Wages From a Second Job Be Included?
Yes, in many cases. If you were working multiple jobs at the time of your injury and the injury prevents you from performing all of them, earnings from your concurrent employment may be included when calculating your workers’ compensation benefits.
What If the Insurance Company Calculated My Wage Rate Incorrectly?
Workers’ compensation insurance companies do not always calculate wage rates correctly.
Common disputes involve:
- Overtime earnings
- Concurrent employment
- Missing wages
- Payroll errors
If your compensation rate is incorrect, you may be able to file a Petition to Review Average Weekly Wage to have the issue reviewed by a Workers’ Compensation Judge.
Talk to a Pennsylvania Workers’ Compensation Lawyer
Your workers’ compensation benefit rate affects the amount of money you receive while you’re out of work and can even impact the value of your settlement. If you believe your wage-loss benefits are being calculated incorrectly, Stern & Cohen can help.
Our team regularly handles disputes involving Average Weekly Wage calculations, overtime earnings, concurrent employment, and underpaid workers’ compensation benefits.
Contact Stern & Cohen today for a free consultation.
FAQs
What is an Average Weekly Wage?
Your Average Weekly Wage is the figure used to calculate your workers’ compensation wage-loss benefits.
What if the insurance company calculated my wage rate incorrectly?
You may be able to challenge the calculation by filing a Petition to Review Average Weekly Wage.
Are workers' compensation benefits taxable?
No. Pennsylvania workers’ compensation wage-loss benefits are generally tax-free.
How often should I receive my workers' compensation checks in Pennsylvania?
Workers’ compensation wage-loss benefits should generally be paid on the same schedule as your regular paycheck before your work injury. For example, if you were paid weekly, you should typically receive weekly workers’ compensation checks. If you were paid every two weeks, your benefits should generally be paid biweekly. If your checks are late, inconsistent, or missing, you may have legal options to recover the benefits you are owed.