By: Robert F. Goings
Workers’ Compensation – Calculating your Compensation Rate and Average Weekly Wage
I am often asked by injured employees, “How is my compensation rate calculated?” The calculation of your compensation rate can have a significant impact on the total award of compensation that you may be entitled to receive under the law for an on-the-job injury.
The compensation rate for a workers’ compensation claim is calculated based on your average weekly wage. So, in order to answer this question, you first must ask another question, “How is my average weekly wage calculated?” Here is how…
In South Carolina, the compensation rate is 66 2/3% of the average weekly wage subject to the maximum and minimum compensation rates in effect on the date of injury. The compensation rate is set as of the date of injury and is not affected by later changes in the allowed maximum or by inflation. The benefits that you receive are not taxable.
A Form 20 is used to calculate an employee’s average weekly wage. The Form 20 is typically completed by the employer’s human resources or payroll department and forwarded to the insurance adjuster for approval. A Form 20 can be found on the SC WCC website here, http://www.wcc.sc.gov/welcomeandoverview/forms/Pages/default.aspx
So what does Average Weekly Wage mean? Average Weekly Wage, or AWW, means the earnings of the injured employee in the employment in which he was working at the time of the injury during the period of fifty-two weeks immediately preceding the date of the injury. Average weekly wage is generally calculated by combining the total wages paid for the last four quarters immediately preceding the quarter in which the injury occurred as reported on the Employment Security Commission’s Employer Contribution Reports divided by fifty-two or the actual number of weeks for which wages were paid, whichever is less.
But how do you calculate AWW if you were employed for a short period of time or if the traditional method of calculating Average Weekly Wage is impractical? In those circumstances, South Carolina workers’ compensation laws allow evidence of similar wages of an employee of the same grade and character employed in the same class of employment in the same locality or community. If the foregoing method of calculation would be unfair to the employer or employee due to exceptional reasons (i.e. a significant increase in salary or significant raise), other methods may be employed to determine what the injured employee would be earning were it not for the injury. The South Carolina statute that governs the calculation of your AWW is S.C. Code Ann. § 42-1-40, which can be found at http://www.scstatehouse.gov/code/t42c001.php. The overall intent of this provision is to ensure fair and just results for both the employer and the employee, designed compensate you for what you were earning if the injury did not occur.
Okay, but I have multiple jobs?
How do I calculate my average weekly wage and my compensation rate if I have more than one job?
What if the insurance carrier refuses to allow my wages from another employer?
Good news! Generally in South Carolina, if an employee works multiple jobs, the employee’s total wages from all employers may be combined to compute his average weekly wage under worker’s compensation law. The employee has the burden of proving wages earned from jobs other than the one where the accident occurred, for purposes of calculating average weekly wage. A good case that discusses this law is Steele v. Self Serve, Inc. 335 S.C. 323, 516 S.E.2d 674 (S.C. App. 1999), which can be found at http://law.justia.com/cases/south-carolina/court-of-appeals/1999/2980.html
If you believe that your compensation rate has been improperly calculated, or that you are being short-changed as a result of how your employer or the insurance company is calculating your compensation rate, please call today for a free consultation from an experienced Columbia Workers Compensation attorney.