If you experience a wage loss because of a work injury, the wage loss benefits you receive from the insurance company are typically based on your earnings before the injury.
The insurance company comes up with what is known as your average weekly wage, using your pre-injury earnings. Your average weekly wage includes all your gross wages, including overtime and bonuses. If you have a second job at the time of your injury, your average weekly wage also includes those wages. The higher your average weekly wage, the higher the wage loss benefits you receive.
Generally, the benefits you receive are two-thirds of your average weekly wage. It is critical that your average weekly wage is correctly calculated. Too many workers have their average weekly wage miscalculated by the insurance company. Even a few dollars difference in your average weekly wage can add up to hundreds or thousands of lost dollars over the course of your claim and can also affect the settlement value of your case.
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What Is Workers’ Compensation?
Before we take a look at the benefits to which you are entitled and how to calculate them, let’s take a few seconds to look at the workers’ compensation program.
In every state, there is a mandated workers’ comp insurance program that requires payments be made to an employee who is injured or disabled on the job. While some states mandate that companies employing a small number of people don’t have to have workers’ compensation, in Pennsylvania, every company that employs even one person must also have workers’ comp.
The federal government has its own workers’ compensation plan. Therefore state-mandated programs do not cover federal employees.
In almost every case, a worker injured on the job will receive workers’ compensation even if they were the one responsible for their injury. Workers’ compensation is a “no-fault” insurance program. Workers’ compensation does not cover any employee who was intoxicated, high on drugs, or initiated a fight at work when they were injured at work. In every other situation, however, if an employee causes an accident at work while performing a job-related task, they are covered by workers’ compensation.
In Pennsylvania, once you report an injury to your employer, you do not receive workers’ compensation benefits for the first seven days. Benefits will begin on the eighth day. If your injury means that you will be off work for more than 14 days, you will receive payment for the first seven days as well. If you are off work less than seven days, however, you are not eligible for workers’ compensation benefits.
Because workers’ compensation is no-fault, if an employee chooses to apply for workers’ compensation, they cannot sue their employer. If the employee decides to forego workers’ compensation and sue their employer — for instance, in a situation where an employer or a fellow worker has intentionally injured the employee — it may mean greater financial rewards if they win their case. If they don’t, however, it means they receive nothing. If you are thinking of filing a lawsuit against your employer because you feel they have intentionally injured you, you should first speak to an experienced workers’ compensation attorney.
The idea behind the workers’ compensation program is to produce a win-win for both parties. Employees receive reduced wages but can access medical and wage benefits quickly after their injury. Employers save money by not having to fight lawsuits but are required to pay into a workers’ compensation insurance program even if there are relatively few accidents on the worksite.
What Expenses Are Covered by Workers’ Comp?
When a worker is injured while they are working, they are entitled to receive benefits in the following categories:
- Medical attention for the injury or the illness they suffered on the job.
- Replacement funds for lost wages, normally about two-thirds of their state’s average weekly wage (SAWW).
- Any costs involved in retraining for a new job.
- Financial compensation if their injuries are permanent.
- Benefits for the families if the worker is killed on the job.
Unlike a personal injury case, however, workers’ compensation does not provide any benefits for pain or suffering caused by the injury.
As noted above, wage replacement, in most cases is two-thirds of the SAWW. It should be noted, however, that there are minimums and maximums amounts for these benefits. For example, in Pennsylvania, the maximum amount in 2018 is $1,025 a week. This means that even if you are earning a six-figure income and you are injured on the job, the maximum benefit that you can receive is $1,025 a week. On the other hand, these replacement wages are tax-free.
What Are the Different Types of Disability Benefits in Pennsylvania?
In Pennsylvania disability benefits for an injured employee fall into one of four categories:
- Temporary partial disability (TPD)
- Permanent partial disability (PPD)
- Temporary total disability (TTD)
- Permanent total disability (PTD)
When a person has a temporary disability, this means they expect to recover from their injuries but may still be healing. A permanent disability rating means that an injured employee’s medical condition is stable but not expected to improve. To put it another way, it many calculations go they have reached their maximum medical improvement (MMI).
A worker who has a total disability cannot work in any employment. Their disability prevents them from doing any kind of work, even if only temporarily. Partial disability means that the employee can still work in some capacity, but probably with restrictions from their doctor that limit them to reduced duty work or perhaps work that is more sedentary.
Are Workers’ Compensation Benefits Different State-By-State?
Although every state has some form of workers’ compensation benefits program, there are some differences.
In some states, an employer needs to employ more than five people before they must contribute to a workers’ compensation plan. In Pennsylvania, however, an employer needs to employ only one person before they must contribute to workers’ compensation. This is true regardless of the number of hours the employee works or even if the employee is the spouse of the employer or their child.
Another difference is that some states do not allow workers to apply for PPD benefits. In Pennsylvania, however, a worker injured on the job can apply for permanent partial disability. An injured worker is eligible for PPD benefits for a total of 500 weeks, or just over a nine-year period. The weeks do not have to be consecutive but cannot total more than 500.
Pennsylvania law also provides for some exemptions that are not seen in other states. Workers’ comp does not cover these types of employees:
- Domestic or casual laborers
- Licensed insurance agents who work on commission only
- Employees of a farmer who work less than 30 days a year or earn under $1,200 per year
- Spouses of a farmer or children of a farmer who are under 18
How Do I Calculate My Workers’ Compensation Benefits?
If you are injured on the job in Pennsylvania, you can receive roughly two-thirds of your weekly wage up to the maximum amount, which, as we noted above, is $1,025 for 2018. The amount that you are owed is calculated using the average of your gross weekly wage.
You calculate your average gross weekly wage by totaling up all wages you earned from an employer for whom you were working at the time of your injury. If you were working two jobs when you were injured, you could include the wages lost from both jobs when determining your average weekly wage. This figure includes overtime, tips reported on your taxes, any vacation pay or bonuses, and payments for lodging if your employer was providing housing for you.
Pay attention to those latter categories. While it’s relatively easy to gather information on your gross wages, many workers’ compensation insurance companies make costly mistakes when calculating for items like bonuses or vacation pay. If you feel that the insurance company has neglected to include these funds when calculating the average weekly wage that will be used when determining your benefits, contact an experienced workers’ compensation attorney to help you.
How Do I Calculate the Average of My Gross Weekly Wage?
You can calculate your gross weekly wage by using all the wages that you receive from anyone who employed you during the last 52 weeks before your injury, as well as the supplemental categories mentioned above.
In Pennsylvania, you are covered under workers’ compensation from the day you start working. This means that even if you’ve only been on the job one day, you are still covered under workers’ compensation. In this case, where you would not have 52 weeks of wages from the employer, the average of your gross weekly wage is determined by multiplying what you earn per week by 52.
If your wages are different every, you need to collect the pay stubs for the 52 weeks before your injury. If you don’t have the pay stubs, check with your payroll department to find out how to access them or get duplicate copies.
Here’s how you determine your weekly wage:
- Separate the 52 weeks before your injury into four different 13-week periods. You then add up all the gross wages you earned during each of those four 13-week periods.
- If you are paid every two weeks, simply divide by two any of the wages covered by the two weeks that are split between two periods. Then take half of those wages for the first 13-week period and add the other half to the next 13-week period.
- Take the totals for each period and divide by 13. Since your wages vary, you’ll likely come up with four different figures.
- Add together the highest three numbers and divide by three. This is your average gross weekly wage.
- Include any supplemental pay from bonuses or incentives by dividing the total for the previous year by 52. Add this to your average gross weekly wage.
Here’s an example:
Let’s assume that when you add together all your gross wages for the four 13-week periods, you get these numbers:
Then divide each of these by 13 for the average weekly wage per 13-week period:
Add together the three highest, then divide by three:
- $785.31 + $850.15 + 920.54 = $2,556.00
- $2,556.00/3 = $852.00
Include your pay from the supplemental categories:
- $1,450/52 = $27.88
- $852.00 + 27.88 = $879.88
Other scenarios involve what you need to do if you’ve worked less than 13 weeks for one employer. In these cases, we recommend speaking with an experienced workers’ compensation attorney.
What Figure Should I Use to Determine How Much I Will Be Receiving in Benefits?
Now that you have figured out the average of your gross weekly wage, you can determine your weekly workers’ compensation benefit by dividing that number by two-thirds. So using the figure in our example above of $879.88, your tax-free weekly benefit would be $586.59.
The Pennsylvania Bureau of Workers’ Compensation rate schedule page can provide yearly updates on the minimum and maximum SAWW that you can receive based on your gross weekly wage, as well as the percentage used to determine your weekly benefits. Normally this is 66 percent of your income, but can be up to 90 percent for low-income workers.
What About Partial Permanent Disability Benefits?
If you have a partial permanent disability benefit, your benefits are determined by guidelines developed by the American Medical Association.
These benefits are paid if you can return to your job, but you earn less than you did previously because your disability has limited your ability to do your previous job. The benefits are determined by looking at the difference between your average weekly wages before the injury and what you would be able to earn after the injury. As with other wage loss benefits, you usually receive two-thirds of that difference.
Pennsylvania uses a schedule of loss which determines how much and how long you will be paid for disabilities in various parts of your body.
For example, based on the loss of the use of a lower leg, the schedule awards 350 weeks of benefits. If you have lost 50 percent of the use of your leg, that means that you would receive 176 weeks of disability payments, multiplied by two-thirds of your average weekly wage. You would use the schedule if you or your attorney agreed to a lump sum payment from your employer’s insurance workers’ compensation company.
Are There Additional Benefits Under Workers’ Compensation in Pennsylvania?
Yes, Pennsylvania law does provide additional benefits under workers’ compensation. These are the benefits listed above, including medical benefits, job retraining, death benefits for your family if you are killed on the job.
Two other benefits include mileage reimbursement, which covers any travel to or from doctors’ appointments, and funeral expenses, which will pay your family up to $3,000 in funeral and burial expenses if you are killed on the job.
Let KBG Injury Law Help You With Your Workers’ Compensation Claim
As you can see from the examples above, many calculations go into determining how much you should receive in benefits if you are injured on the job. It’s also important to realize that your employer’s workers’ compensation insurance company is not there to help you receive those benefits. In fact, they will do everything they can to make sure that you received as few benefits as possible or none at all.
Miscalculations done when determining your average weekly wage can result in the loss of thousands of dollars of benefits over time. It makes sense to work with the experienced attorneys at KBG Injury Law when you calculate your workers’ compensation benefits. Our attorneys will make sure that you and your family receive all the benefits to which you are legally entitled.
If you think there might be an error in your average weekly wage, or simply want someone to review your average weekly wage calculations, please call us for a free consultation. You can call us at 1-800-509-1011 or visit our contact us page where you can leave us details about your situation and your contact information. Member of our team will get back to you as soon as possible.