Your employee gets hurt on the job. The injury is compensable, and he or she goes out of work completely and receives temporary total disability (“TTD”) benefits or is only able to work in a reduced capacity and receives temporary partial disability (“TPD”) benefits…
Your employee gets hurt on the job. The injury is compensable, and he or she goes out of work completely and receives temporary total disability (“TTD”) benefits or is only able to work in a reduced capacity and receives temporary partial disability (“TPD”) benefits. The employee/claimant is entitled to two-thirds of his or her gross earnings up to $550.00 per work in TTD benefits and $367.00 per week in TPD benefits. You take the claimant’s gross wages from the prior full thirteen weeks, add them up, and divide by thirteen to arrive at his or her average weekly wage. Simple, right? Not so fast. There are several scenarios where the seemingly simple task of calculating the average weekly wage can become far more complex, and there are common pitfalls we can all fall into that can come back to bite us down the road if we are not careful.
O.C.G.A. §34-9-260 outlines three methods for calculating a claimant’s average weekly wage: (1) if the employee has been employed in the same employment for “substantially the whole” of the thirteen preceding weeks before his accident with the employer or another employer then his average weekly wage is one-thirteenth of his gross wages over that period; (2) if the employee did not work “substantially the whole” of the thirteen weeks prior to the accident then the wages of a similarly situated employee shall be used; (3) and finally, if neither of the preceding two methods can be fairly applied, the average weekly wage becomes the employee’s “full-time wage” or the hourly rate paid to the employee multiplied by the average number of hours the employee was normally scheduled to work. In this article I will focus on the first, most common method, and some situations where using it to calculate a claimant’s average weekly wage can become complicated.
Penalties for Late Payments Apply to Miscalculations
It is important to keep in mind the stakes when calculating a claimant’s average weekly wage: per O.C.G.A. 34-9-221(e), employers/insurers are liable for a 15 percent penalty for indemnity benefits not paid when due (and due without an award from the Board); this includes underpayments, even if the underpayments are the result of an honest miscalculation or incorrect determination of the claimant’s average weekly wage. Such mistakes or miscalculations can be a costly if the underpayments have been going on for months or even years before being caught by a newly hired claimant’s attorney.
Avoid Miscalculations by Utilizing Microsoft Excel
The first mistake we often see is simply miscalculating a claimant’s average weekly wage. It is not uncommon that we find a handwritten WC-6 filed with the Board, which has the claimant’s correct wages listed for all thirteen weeks, but includes an average weekly wage has been calculated incorrectly. This is likely because the person who submitted the WC-6 only utilized a calculator when calculating the average weekly wage. When calculating a claimant’s average weekly wage in this manner, it is easy to input a wrong number or put a decimal in the wrong place for one week’s worth of wages. In doing so, you can wind up with an average weekly wage that is off by just enough not to catch before filing. When using only a calculator, it is impossible to tell if all thirteen weeks were inputted correctly. It is good practice to utilize Microsoft Excel to calculate a claimant’s average weekly wage. By inputting the weekly wages into Excel, the numbers you have inputted will be right in front of you, so you can easily catch any errors, and Excel will even total them simply by highlighting the values. You can then be certain you totaled the wages correctly before dividing by thirteen. This method makes it virtually impossible to incorrectly input the claimant’s wages, and can save you headaches (and more importantly money) down the road.
To Include or Not to Include
The method outlined in O.C.G.A. §34-9-260(1) seems as though it could not be more straight forward, but that is not always the case. Bear in mind Board Rule 260, which states that the “computation of wages shall include, in addition to salary, hourly pay, or tips, the reasonable value of food, housing, and other benefits furnished by the employer without charge to the employee and are capable of pecuniary calculation.” Indeed, Georgia courts have held that “any monetary payment or noncash benefit received by the employee in consideration of labor or services performed that constitutes a net economic gain to the employee should be included in the calculation of the average weekly wage.” Thus, when calculating a claimant’s average weekly wage, one always wants to clarify with the employer precisely how the claimant was compensated before submitting the WC-6 and initiating benefits. If the claimant received commissions, tips, or other benefits on top of their wages, these additional forms of compensation should be taken into account.
Even though tips are typically provided by customers, and not the employer, they are nevertheless included in claimant’s average weekly wage. In fact, even if a claimant tries to cheat the IRS and omits them from his tax returns, the Board’s position is that they still must be included. Pizza Hut Delivery et al. v. Blackwell, 204 Ga.App. 112 (1992). Bonuses paid out during the 13 week period must also be included, even though this can lead to an artificially inflated average weekly wage. Commonly restaurant workers and fast food workers are given free or reduced cost meals; the fair market value of these meals will be considered compensation and can become part of a claimant’s average weekly wage. Caremore, Inc./Woodhill Nursing Home v. Hollis, 283 Ga. App. 681 (2007).
How about an employee who receives expenses in order to perform his or her job or a claimant who is paid mileage for traveling? To the extent that payments for expenses or mileage exceed the claimant’s actual expenses, these payments become a part of the claimant’s average weekly wage. Atlanta Journal Constitution v Sims, 200 Ga.App. 236 (1991). In fact, if a claimant is paid a flat fee for expenses, and the employer does not keep track of the actual expenses paid, the Board could rule that the entirety of the expense payments become part of the average weekly wage. Lumbermans Mut. Cas. Co. v. Babb, 67 Ga.App. 161 (1942). As a practical tip, in such an arrangement employers should always require employees to turn in receipts and track expenses whenever possible.
However, in contrast to the liberal construction of the calculation of the average weekly wage generally, Georgia courts have determined that fringe benefit are not included in a claimant’s average weekly wage. Fringe benefits include an employer’s payment of premiums for health insurance, life insurance, or disability insurance, as well as payments to an employee’s pension. Groover v. Johnson Controls World Serv., 241 Ga.App. 791 (2000).
In summation, the calculation of a claimant’s average weekly wage can seem simple, and is often mundane and tedious. Such a simple task can get lost in the weeds as we focus on managing medical care and other more involved tasks associated with workers’ compensation claims. However, it is paramount that we ensure that we calculate a claimant’s average weekly wage correctly at the outset of a claim; else it can wind up costing us a substantial amount of money down the road.