Determining fair worker’s compensation wages can be tricky. Generally, workers’ compensation pay is based on the amount of money you earned at work for 52 weeks before the accident date. If you only worked for this employer for a short time before the accident, your workers’ compensation wage rate can be based on how much you earned during that short time, unless the result is unfair to you or unfair to the employer. If unfair, your employer might look at the wages of a similar employee in a similar position to yourself, who has worked for that company for 52 weeks or more. If the calculations using a similar employee are unfair to your employer or yourself, another solution can be discussed.
The ultimate goal is that workers’ compensation wages are supposed to fairly represent how much you were reasonably expected to earn with this employer. Your wage rate should not be inflated upward or downward but should be reasonable to you and your employer.
Once it is determined what a fair worker’s compensation wage was for that 52-week period, your work comp rate of pay is based upon the following formula: 52-week wages/52 x 2/3. Taxes are not deducted from work comp pay.
For example, if you earned $40,000 or were expected to earn $40,000 during the 52-week period before your accident, the calculation would be as follows: $40,000/52 = $769.23 x.666 = $512.30. Your work comp pay rate would be $512.30 per week. Seems simple, right? Not always!
A word of caution: sometimes employers or the employer’s worker’s compensation insurance company will report only portions of wages, inaccurate wages, leave out overtime calculations, or factor time periods that have a negative impact on an injured worker’s weekly pay rate. We see this all the time! While it may only save a little money to the employer or their worker’s compensation insurance carrier, the lowered rate may cause an injured worker to be more stretched for cash or render them unable to cover their bills every month. Also, if the injured worker ends up being off work for 6-12 months, the cost to their pocketbook can really add up. A trained worker’s compensation attorney can make sure that the calculation of your pay is reasonable and accurate.
If you have questions or need assistance on this topic, please feel free to call the attorneys at Klezmer Maudlin. Our attorneys handle work comp claims statewide, and we have physical offices in Lafayette, Indianapolis, Jeffersonville/New Albany, and Evansville/New Harmony.