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Average Weekly Wage- Maryland Workers Comp

Average Weekly Wage (AWW) in Maryland Workers Compensation cases

Calculating the average weekly wage in a Maryland Workers Compensation case is important and can directly effect the value of the case, the lost wage checks, permanency payouts, and vocational benefits paid out.  The average weekly wage can be changed up until the first hearing before the workers compensation commission.  After that point the injured worker may be stuck with a lower wage which will result in lost money and wrongly reduced lost wages

How To Calculate the Average Weekly Wage in a Workers Comp Case

IF AN INJURED WORKER IS PAID BY THEIR EMPLOYER EVERY WEEK OR EVERY OTHER WEEK than the calculations are seemingly straight forward.  The 14 weeks of paychecks prior to the injury are added up and divided by 14.  The week the injured worker was hurt should not be used because it will likely be a short week if time from work was missed because of the accident.  With this straight forward method of calculation it is hard to imagine any issues would arise but they often do.

IF AN INJURED WORKER IS NOT PAID EVERY WEEK OR EVERY OTHER WEEK

Some employees are paid once monthly, daily, or otherwise not paid by their employer every week or every other week.  There are also employees that may be seasonal such as teachers, or construction workers who often are laid off from work for an extended period of time.  For these employees the average weekly wage will be calculated by using at least 98 days prior to the date of injury.  The employees gross wages (before taxes) are then determined for the period of time chosen.  It could be  for 98 days or more.  Gross wages should include tips, living expenses paid for by employer, lodging, and any other stipend provided.  For instance, an apartment maintenance man will sometimes be provided an apartment free of charge for his services on the property.  The ordinary cost of the apartment should be considered in the gross wage calculation.  For waitresses or waiters their tips and, meals if provided, should be factored into the calculations.
The gross wages are then divided by the number of days, whether it be for 98 days or more.  The final step is to take that number and divide it by 7 to get the average weekly wage. 

Issues That Arise When The Average Weekly Wage is Miscalculated

All workers comp money an injured Maryland worker receives are based on the average weekly wage.  As I previously stated if the AWW is miscalculated then the temporary total disability payments (lost wages), permanency awards, vocational benefits, or temporary partial disability payments will be affected.  If the average weekly wage is miscalculated lower, the injured worker will be paid less than what they are entitled.

For example, injured worker X has an average weekly wage of $800 dollars.  The insurance adjuster mistakenly calculated the AWW to be $600.  She failed to include the weekly food allowance paid to the injured worker X.  Lost wages, paid at 2/3 of the AWW,  have been paid for 8 weeks at a rate of $400.00 weekly.  With the correct AWW being $800, X should have been receiving $533.oo weekly.  In 8 weeks the injured Maryland worker was shorted $1,064 ($533 – $400= $133.  $133 x 8= $1,064).  The good news for X is that if there has not yet been a hearing to determine the average weekly wage, then a qualified and experienced Maryland workers compensation attorney should be able to recover the owed money.  If however, there has been a hearing the injured worker may unfortunately have no chance in correcting the average weekly wage.

Common Mistakes When Calculating the Average Weekly Wage for a Maryland Workers Compensation Case

A seemingly straight forward and easy process regularly ends in miscalculations and errors.  There are a number of explanations as to why miscalculations occur. 

Injured Maryland workers should understand unless they have an attorney there is no one looking out for their interests.  Adjusters, or employer may calculate the AWW with less regard to miscalculations than if a representing attorney, or the injured worker themselves calculates the AWW.  This is not to say that there is an intentional effort to short change injured workers by adjusters, but naturally no one will have more concern over their financial well being than the injured worker themselves.  

If it is not an inadvertent mistake by the adjuster or employer it may simply be lack of knowledge or understanding on how to calculate the correct average weekly wage.  Occasionally the week the injured worker was hurt is used in the calculations.  If time was missed from work that week because of the accident then the weekly pay will be lower and result in a lower average weekly wage.  It is for this reason under Maryland law we do not use the week the injured worker was hurt.  The Code of Maryland Regulations (COMAR) actually indicates that the entire pay period on which the injury date occurs should be excluded when calculating the AWW.   

More often the average weekly wage is miscalculated because not all of the “wages” are included.  §9-602 of the Labor and Employment Article lays out what wages shall include.  Tips, value of housing, lodging, meals, rent, “and other similar advantages” provided by the employer are all included in wages.  The language chosen by the legislature provides attorneys some room for argument because “other similar advantages” is not defined.

On occasion when the Average Weekly Wage is calculated there is a period of time included in the 14 week period when the employee had missed work.  If it is a regular occurrence such as calling out once a week then the period should not be disturbed.  However, if an employee regularly gets paid a certain amount, but coincidentally in that 14 week period he or she missed two weeks for vacation then the two weeks should not be included in the calculation.  Comar 14.09.01.07 A (2) indicates the 14 weeks should include those weeks the employee “actually worked” which indicates that weeks he or she did now work would not be included in the calculations.  Likewise, if the employee was sick for four days in one of the 14 weeks then that week should be left out of the calculation because it does not accurately reflect the wages the employee ordinarily earned. COMAR, 14.09.01.07 A (1) specifically states that periods of involuntary layoff or involuntary authorized periods of absence  should not be included in the calculations. 

Something as simple as the Average Weekly Wage calculations can cost an injured Maryland worker tens of thousands of dollars

As indicated in our example above, a miscalculation of the average weekly wage can mean the loss of benefits to which the injured worker would otherwise be entitled.  In the example, a period of 8 weeks was used, however had that same employee been out of work for longer than the $1,000 loss would have been greater.  Injured Maryland workers who undergo surgery or prolonged treatment can be held out of work for years.  An inaccurate Average Weekly Wage can quickly amount to thousands upon thousands of lost money.

See the Statement of Wages form here

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Maryland workers compensation attorney Andrew M. Rodabaugh and his office offers information about Personal Injury law and Workers’ Compensation for informational purposes only. Nothing contained herein constitutes formal legal advice. If you need the advice of a Maryland workers compensation lawyer, please contact him today. He has offices throughout the state and various convenient meeting locations.  Each and every case needs to be evaluated before legal advice can be provided.