If you are injured at work, you may be eligible for worker’s compensation. This can provide you with support such as disability benefits or financial compensation to cover medical bills and expenses or loss of wages when taking prolonged time off work.
When determining how much money you’re eligible for in these scenarios, having your AWW (Average Weekly Wage) is useful. This ensures you receive the appropriate level of financial support and access to benefits such as temporary total disability benefits.
Definition of Average Weekly Wage (AWW)
Whether you work on a freelance basis or a permanent contract, your average weekly wage (AWW) represents your pre-tax earnings over a 52 week period. By accurately determining your AWW, you can better determine how much income you’ve lost by taking time off work to recover from your injuries.
This also impacts benefit calculations for:
Temporary Total Disability Benefits. Calculated at ⅔ of your AWW.
Permanent Total Disability Benefits. Calculated at ⅔ of your AWW.
Temporary Partial Disability Benefits. Calculated at ⅔ of the difference of your post-injury AWW and your pre-injury AWW.
While ⅔ of your AWW is generally correct, the Virginia Workers’ Compensation Commission multiplies your AWW by 0.66667 to determine how much the insurance company will have to pay you each week, also known as your “compensation rate.”
Failing to accurately calculate your AWW could mean you do not receive the compensation you deserve. However, various factors can influence your AWW, as discussed below.
Types of Income Included in AWW Calculation
Various different types of income must be taken into account when calculating your AWW. This includes:
- Wages from primary employment
- Overtime pay and bonuses
- Income from secondary employment
- Income earned through commissions
- Income earned through tips
- Per diems
- Other perks that can be assigned a monetary value (i.e., company car, apartment, etc…)
Exclusions from AWW Calculation
Certain exclusions apply when filing a worker’s compensation claim against an employer and calculating your AWW. These include non-wage benefits and perks, such as health insurance, PTO (paid time off) allowance, and retirement contributions. Severance pay, travel allowances, and reimbursements are not contributory factors to your AWW.
If you work as a freelancer, your AWW should only reflect the work carried out for the employer in question instead of factoring in all self-employment work.
Methods for Calculating AWW
There are various ways in which insurance carriers, state agencies, and workers calculate AWW. In Virginia, state statute defines AWW as your gross earnings for the 52 week period before your accident, or this formula:
Annual Pay/52 = Average Weekly Wage.
However, in some scenarios, they may determine your AWW by dividing your total earnings by pay periods. For example, if you’ve only worked at the company for 10 weeks they’ll consider your earnings since you started working for the employer and divide this by the number of weeks worked. State law does allow for other calculations of AWW depending on specific circumstances.
If your income fluctuates each pay period or your work schedule is atypical or irregular, this will also be considered when calculating your AWW. For example, overtime payments will be factored into your AWW.
Examples of AWW Calculation Scenarios
Scenario 1: Single employment worker, working for more than 52 weeks for the employer
In this scenario, an employee has only one job and has worked over one year for the employer. To calculate the employees AWW we would take the total amount of earnings over the prior 52 weeks and divide by 52.. The following formula will be used:
AWW = Total Earnings / 52 weeks.
Scenario 2: Single employment worker, working for less than 52 weeks for the employer
In this scenario there are two ways to calculate the employees AWW. First we could take the total earnings over the length of their employment and divide by the number of weeks worked. The following formula will be used:
AWW = Total Earnings /Number of Weeks Worked
However, because the employee worked less than 52 weeks Virginia law allows the Commission to use the wages earned by a coworker who had worked more than 52 weeks in the year before the accident. The following formula would be used:
AWW = Similar coworker total earnings / 52 weeks
Scenario 3: Employee with multiple jobs or sources of income
There are two possibilities in this scenario. The first is if the jobs worked by the employee have similar job duties, the second is if the job duties are not similar. If the job duties between the various employers are similar you can count the earnings from each employer.
AWW = Total Earnings from Injury Employer + Total Earnings from Second Employer / Number of Weeks Worked.
If the job duties are not similar, then you would only count the earnings from the injury employer. So unfortunately an employee in this situation would not be able to be compensated by workers’ compensation for wages lost in their second job.
AWW = Total Earnings from Injury Employer / Number of Weeks Worked.
Importance of Accurate AWW Calculation
Your AWW will impact the amount of compensation benefits you receive, whether you are seeking temporary total disability benefits, permanent total disability benefits, or temporary partial disability benefits. In all of these scenarios, the benefits are calculated at ⅔ (0.66667) of your annual wage, though this can vary on a case-by-case basis or in relation to the severity of your injury.
Inaccurate calculation of your AWW can have severe legal consequences, as it means you receive more benefits than you are strictly entitled to. Similarly, if an employer has reported inaccurate AWW, this could limit the amount of support you receive, and an appeal is necessary.
Resources and Tools for AWW Calculation
Fortunately, many resources and tools are available to those trying to determine their AWW so that they can access the support they need and deserve. For example, you could use the online calculator provided by the Virginia Workers Compensation Commission.
Working with a worker’s compensation attorney can also be helpful during this time. After all, not only can they assist you when it comes to determining your AWW and benefit eligibility, but they can also ensure you put your best foot forward when making a claim. For example, they can ensure you have the relevant evidence to hand, such as:
- Pay slips or pay stubs.
- Bank statements.
- Tax returns.
- Time sheets.
- Contracts and invoices.
Common Mistakes to Avoid in AWW Calculation
Great care should be taken when calculating AWW to avoid mistakes. For example, it’s relatively easy to misinterpret which income sources can be included in your calculator and which must be omitted. You must also ensure that fluctuations in your earnings, such as overtime pay or bonuses, are included.
Work With a Virginia Workers’ Comp Law Attorney in Richmond
If you are about to file a worker’s compensation claim but are looking for an experienced Virginia Worker’s Compensation Attorney you can trust to support you during this time, look no further than Renfro & Renfro.
From calculating your AWW to preparing you for court, we’ve got your back every step of the way. Get in touch today to find out more or to request a free case evaluation.
