Workers’ Comp Lawyers in OKC
Introduction to Calculating Your Oklahoma Average Weekly Wage to Maximize the Cash Value of Your Worker’s Compensation Settlement
Improper calculation of an injured employee’s average weekly wage could cost the worker tens of thousands of dollars in lost cash benefits over the lifetime of his or her claim. This is because every single worker’s compensation cash indemnity benefit (except disfigurement benefits) in Oklahoma is calculated based upon a worker’s average weekly earnings before his or her injury. Certainly the higher the worker’s average weekly wage the larger his or her weekly temporary total disability check, temporary partial disability benefit, his or her permanent partial disability settlement, the amount of the worker’s permanent total disability award, and finally the aggregate weekly and lump sum cash amount of the worker’s dependents’ death benefit in case of the worker’s death following a work-related accident. Proper calculation of an injured worker’s average weekly wage is probably the single most important task one should do before approaching other issues in the case.
Gone are the old days where workers were paid a set amount per hour for a straight forty-hour work week or even received a constant salary paid on a periodic basis. Employer’s today take advantage of special laws and creative schemes to pay their workers which obviously inure to the employer’s benefit and lessen the employer’s tax and other regulatory costs and burdens. So complicated is the process that most Oklahoma employers simply rely on payroll processing companies to assist with paying their direct employees to fully exploit these loopholes. What results for the injured employee is a complicated pay or compensation system and confusing payroll records and other information which can make calculating the injured worker’s average weekly wage a somewhat daunting challenge. Unfortunately Oklahoma Workers’ Compensation insurance companies take advantage of these complicated pay practices and methodically calculate an insured hurt worker’s average weekly wage in a way that will minimize his or her income replacement benefits and ultimately the final settlement value of the case.
Mistakes are often made in the calculation of an injured worker’s average weekly wage and, not surprisingly, these mistakes are typically made in the employer’s, not the employee’s, favor. Failure to include an injured worker’s routine overtime (or even if included failure to calculate AWW at time-and-a-half as mandated by Federal law), failure to include health, dental, disability and/or life insurance as well as other ‘fringe’ benefits into AWW calculations, failure to include ‘per diem’ and other ‘in kind’ renumeration such as ‘room and board’, and finally, refusal to count performance and other routine or non-routine ‘bonuses’, unused leave, vacation and sick time are just some of the items that employers and their workers’ compensation insurers conveniently leave out of an injured worker’s pre-accident earnings when computing that worker’s average weekly wage for benefit computation purposes. Another trick is to include as full pay periods time before the worker was hired or after he or she was injured and unable to work. Also a common practice is for an insurer to simply average a worker’s average weekly wage over an extended period of time (such as a year if available) before his or her injury (or a substantial raise) and fail to consider that the worker recently, before his or her injury, received a raise which undoubtedly would increase his or her average wage over the next fifty-two-week period had he or she not been injured. By doing so the injured worker’s average weekly wage would also be his pre-raise average weekly wage. These blatant omissions of course drive down the worker’s average weekly wage which invariably drives down the value of the worker’s weekly income replacement check and eventually his or her final cash settlement made on the case.
The amount of money an insurer can save on an individual case his obvious. However, if the practice of understating a worker’s pre-injury average weekly earnings is practiced by a workers’ comp insurance company across many states and multiple industries, the amount of money paid out over thousands of claims can be reduced in the millions.
Workers’ compensation insurance carriers will unilaterally calculate an insured worker’s average weekly wage and simply force that number upon the claim and without any input whatsoever from the employee. Certainly, an injured employee is not required to accept an incorrect and artificially deflated average weekly wage calculation. However, in order to challenge and defeat an insurance company’s improper calculation of a worker’s average weekly wage the employee will be required to possess or obtain proper information about his or her pre-injury earnings and other compensation, apply the correct law to that information, and present that information to a Oklahoma Workers’ Compensation Judge at an evidentiary hearing so that a final order can be entered properly determining the correct average weekly wage as it applies to that particular case. All this must be done at the beginning of the case when temporary benefits are being determined, if at all. An injured worker who waits and otherwise fails to challenge an improper average weekly wage calculation made by an insurer may have given up and waived his or her right to argue that issue later in the case and will be forced to endure a low benefit rate throughout the remainder of the claim—which for some cases could be for the injured employee’s lifetime. It is for this reason that an injured worker should contact an Oklahoma City or Tulsa Workers’ Compensation attorney as soon as possible after suffering an Oklahoma work-related injury so he or she can get the timely and maximum compensation allowed by Oklahoma law.
IN OKLAHOMA CALCULATION OF WORKER’S AVERAGE WEEKLY WAGE INCLUDES MORE THAN JUST THE CASH OR MONETARY AMOUNT OF HIS OR HER PAYCHECK
The Oklahoma Workers’ Compensation Court has been determined that the term ‘Wages’ when determining an injured worker’s average weekly wage for benefit calculating purposes means, of course, the monetary compensation being paid to that employee at the time of the accident, but also other items of value including, but not limited to, the reasonable amount of room and board, rent, housing, lodging, or similar benefit provided by an employer in exchange for work being performed by the injured worker. It would also necessarily include the actual amount of tips reported by the worker to the IRS (or the amount which should have been reported by that worker’s employer and which the employer failed to report), whatever amount is larger.
PUTTING PEN TO PAPER – CALCULATING OKLAHOMA WORKER’S AVERAGE WEEKLY WAGE (AWW)
According to Oklahoma Law, a worker’s average weekly pre-injury earnings are calculated by one of the following mutually exclusive methods:
- By taking the gross amount the injured worker made working for his or her employer and dividing this sum by the actual number of full weeks said employee performed work for such employer (up to a maximum of fifty-two weeks) to come up with that worker’s AWW.
NOTE: Overtime should, of course, be added to an injured worker’s gross earnings before and when calculating that worker’s average weekly wage.
- If, by chance, the above method cannot be used to accurately and fairly calculate a given injured worker’s average weekly wage—a Judge of the Oklahoma Workers’ Compensation Court can instead calculate this worker’s average weekly wage by using an alternative method that will indeed fairly and properly calculate that weekly rate. This method, however, will only be reserved for the most unusual of cases.
The first step in maximizing any Oklahoma Workers’ Compensation cash settlement is proper documentation and calculation of an injured worker’s average weekly wage. This must be done, if at all, at the beginning of the case. Please contact ASH | LAW to speak with an Oklahoma workers’ compensation lawyer if you think you are being underpaid workers compensation benefits or any other matter regarding your Oklahoma work comp case.