If you are partially or totally disabled due to a work-related injury, your Pennsylvania Workers’ Compensation rate – the amount that you will be paid – is of critical importance. Despite this, most people have little understanding of what their compensation rate should be, and often simply accept that what the Workers’ Compensation insurance carrier tells them and assumes that their Workers’ Compensation rate is accurate. Many times, however, an injured worker will contact us after being on Worker’s Compensation benefits for a period of time, and we discover that the Workers’ Compensation rate that they have been receiving has been wrong. Here are eight things that you need to know, if you become totally or partially disabled due to a work-related injury, regarding your Workers’ Compensation rate.
Workers’ Compensation rates are based upon each individual’s average weekly earnings at the time of their injury. Put simply, someone who earns more is going to receive a higher Workers’ Compensation rate than someone who earns less. Even two coworkers with the same hourly wage rate are likely to have different compensation rates. Determining your individual Workers’ Compensation rate can seem difficult, but it is not nearly as complicated as many may believe.
Calculating Your Workers Compensation Rate in PA
There is a two-step method for calculating your Workers’ Compensation rate. First, you must calculate your average weekly wage. From that, you must calculate your Workers’ Compensation rate.
There are different methods for calculating your average weekly wage. As noted, this is step one of the process. The vast majority of people will have their average weekly wage calculated in one of three methods:
Method number one: If you have been employed for more than nine months by the employer where you sustained your injury, your average weekly wage will be determined by looking back one year from the date of your injury, and averaging the three highest thirteen week periods of time during that year, to get a weekly figure.
Method number two: If you have been employed less than nine months, but more than three months, any two consecutive periods of thirteen weeks during that time can be used to calculate your average weekly wage.
Method number three: If you have been employed less than three months at the time of your injury, the Pennsylvania Worker’s Compensation Act states that your average weekly wage is calculated based upon the number of hours you were expected to work times your hourly rate. Unfortunately, the law is unclear as to whose expectations – yours or your employer’s – regarding the number of hours you were expected to work should be considered. The law is also unclear as to how to handle individuals who are paid on a piecework basis or commission basis, rather than a straight hourly rate. Individuals who have been employed for less than thirteen weeks, therefore, need to be particularly careful to make sure that their average weekly wage has been properly calculated.
Other calculation methods: If your wages are entirely based upon an annual salary, your average weekly wage is determined simply by dividing your salary by fifty-two weeks. If your wages are based upon a set monthly salary, you would multiply that number by twelve and divide by fifty-two. If you have a set weekly wage, that is your average weekly wage. Additionally, in very rare situations where someone has an occupation that is exclusively seasonal (not capable of being performed on a year-round basis), there are special methods of calculation that apply, and which usually result in a lower average weekly wage. Be cautious, however, as employers will misclassify temporary workers or some other types of employment as seasonal, when in fact the work is not seasonal work as defined under the law. Due to the complexity of these situations, it is recommended that if your employer or the insurance carrier says you are a seasonal employee when calculating your average weekly wage that you immediately consult an experienced Worker’s Compensation attorney for assistance.
Your Workers’ Compensation rate for total disability is calculated based upon your average weekly wage calculation. After your average weekly wage is determined, the second step is to calculate your Workers’ Compensation rate. Many people are under a misunderstanding as to the typical percentage of the average weekly wage that is paid as your Workers’ Compensation rate. For most people, the amount that you received is 2/3 of their average weekly wage. However, there are maximums that apply for high wage earners, and minimums that can apply for lower wage earners. A useful tool on our website for calculating your compensation rate once you know your average weekly wage can be accessed by clicking here.
Your total disability Workers’ Compensation rate never changes. Once your Workers’ Compensation total disability rate has been correctly determined, it is set in stone. There are no annual cost-of-living adjustments, and even if you become disabled again several years after your injury has occurred because of that injury, your total disability rate is based upon your earnings at the time of your injury, which are often less than they are when you become disabled years later.
Your Workers’ Compensation rate for partial disability is based upon a comparison of your average weekly wage at the time of your injury and your weekly earnings thereafter. Partial disability benefits are, put simply, payable whenever you have a work related injury that causes you to lose some earnings, but does not completely disable you. Partial disability benefits can sometimes be short-term, such as when you are limited to some type of light duty work while you recover from an injury, or long-term because of permanent restrictions. If you are working following an injury but are losing money because that injury prevents you from doing the full extent of your time of injury job, you need to determine your partial disability Workers’ Compensation rate. Although you will have a fixed figure for your time of injury average weekly wage at this point, often your weekly wages will vary while in light or modified duty. This will usually require a weekly or biweekly (depending upon your frequency of pay) calculation to occur to determine your proper partial disability compensation rate for each paycheck. In order to calculate your partial disability rate, you must subtract your weekly light duty earnings from your average weekly wage, and two-thirds of the difference is your partial disability rate for that week.
Don’t forget about overtime and shift differential in calculating your Workers’ Compensation rate! When calculating your average weekly wage to get to your Workers’ Compensation rate, it is important that you include all of your earnings, which includes overtime pay and shift differential. Many times, employers only report one’s base pay, and do not include overtime or shift differential, when reporting their employee’s earnings to the Workers’ Compensation insurance carrier following an injury. If your employer fails to include these earnings in what they tell the insurance carrier, the calculation of your average weekly wage and Workers’ Compensation rate will, therefore, be too low.
Concurrent employment (second jobs) also count in the calculation of your average weekly wage and your Workers’ Compensation rate. If you have more than one job, you are entitled to be paid Workers’ Compensation benefits based upon the earnings from all of your jobs if you sustain a disabling work injury. The average weekly wage for each job that you hold at the time of your injury must be calculated separately, using the formulas discussed above, and then added together to get a total average weekly wage, from which your Workers’ Compensation rate is determined.
Our office is always available for a free consultation regarding your Pennsylvania Workers’ Compensation claim, which will include a review of your documents that show the calculation of your average weekly wage. We have had instances where thousands of dollars in back benefits were paid to our clients where mistakes were found in the calculations by the insurance carrier.