How to Calculate Your Average Weekly Wage for Workers' Compensation

After a workplace injury, determining your average weekly wage (AWW) becomes crucial for securing fair workers' compensation benefits. Lehmbecker Law's Seattle workers' compensation attorneys help injured workers who receive less than they deserve due to incorrect wage calculations. We've written the article below to explain how to calculate your average weekly wage for workers' compensation because that can make a significant difference in your benefits.

What Is an Average Weekly Wage?

Your average weekly wage, commonly known as AWW, represents how much you earned before taxes during the year before your injury, whether you're a regular employee or an independent contractor. This calculation helps determine the fair amount of wage replacement benefits you should receive when you’re disabled and unable to work.

Your AWW serves as the starting point for calculating several types of disability benefits:

• If you can't work at all, Temporary Total Disability pays you two-thirds of your AWW.
• For permanent disabilities preventing any work, Permanent Total Disability also provides two-thirds of your AWW.
• When you can work but earn less than before because of your injury, Temporary Partial Disability pays two-thirds of the difference between your current AWW and pre-injury AWW.

Each type of benefit is calculated using specific formulas established by Washington State Law, with rates that consider your marital status and number of dependents.

Calculating Temporary Total Disability Compensation in Washington State

In Washington State, under RCW 51.32.060 and related statutes, the time-loss compensation rate (temporary total disability) is generally calculated as follows:

• For single workers: 60% of their average weekly wage.
• For workers with spouses/dependents: 65% of their average weekly wage, plus an additional 2% for each dependent child (up to 5 children).

There are also minimum and maximum benefit levels that are adjusted annually based on the state's average monthly wage.

Components of Your Average Weekly Wage

The average weekly wage calculation includes more than just your regular hourly wage or salary. When calculating wages for workers' compensation, you need to consider multiple income sources. Your total earnings typically include your regular wages, overtime pay, performance bonuses, and commission income. Tips must be reported to count toward your AWW. Some employers also provide allowances for housing or vehicle use, which can factor into your calculation.

However, not everything counts toward your AWW. Health insurance benefits, retirement contributions, and expense reimbursements are typically excluded. Paid time off and vacation pay usually don't factor into the calculation either.

Methods for Calculating Your AWW

The basic principle for calculating your average weekly wage is simple: take your gross earnings (pre-tax) for the year before your injury and divide them by 52 weeks. However, real-world situations often complicate this process.

Situation 1. Full-Time Employment with One Employer

For a full-time employee who has worked one job consistently for more than a year, the calculation starts with total earnings from the previous 52 weeks. Simply add up your gross earnings and divide by 52 to determine your AWW. This provides the most straightforward path to your compensation rate.

Situation 2. Recent Employment or Job Changes

If you worked less than a year before your injury, the calculation changes. The insurance company might divide your total earnings by the number of weeks worked. Sometimes, they'll look at wages earned by a similar employee who has worked the full year to establish a fair rate.

Situation 3. Multiple Jobs and Concurrent Employment

Many injured workers hold more than one job, which can significantly affect their benefits. In cases of concurrent employment where job duties are similar, earnings from both positions might count toward your AWW. However, if your second job involves different duties, those wages may not be included. This distinction often requires careful analysis by a workers' compensation lawyer.

Situation 4. Seasonal or Intermittent Workers

If you work in a seasonal job like construction or landscaping, where you can only work part of the year due to weather, your AWW is calculated differently. Instead of understating your earnings by spreading them across 52 weeks, a "200-day multiplier" is used.

For example, if you're a roofer who earned $36,000 in 150 working days, we first find your daily rate ($36,000 ÷ 150 = $240), multiply it by 200 ($48,000), then divide by 52 weeks for an AWW of $923.08.

Common Average Weekly Wage Calculation Mistakes

Insurance companies often make mistakes when determining an injured worker's AWW. These errors can significantly reduce your benefits over time. Watch out for:

• Overlooking recent pay increases.
• Missing regular overtime patterns.
• Incorrectly excluding bonuses or commissions.
• Failing to account for concurrent employment.
• Using the wrong time period for calculations.
• Mishandling variable work schedules.

Average Weekly Wage Calculation: The Importance of Professional Help

While you can attempt to calculate your own AWW, the process involves many variables that can affect your benefits. Don’t let others take advantage of you. A skilled workers' compensation attorney can ensure your AWW is calculated correctly and help you gather all necessary documentation, including pay stubs, tax returns, time sheets, and employment contracts.

Conclusion

To properly calculate your average weekly wage for workers' compensation, start by gathering all relevant wage documentation. This includes pay stubs, tax records, and documentation of other compensation. Consider your employment situation, including any second jobs or variable income patterns. Don’t forget to include overtime, bonuses, and other additional earnings that count toward your AWW.

However, given the complexity of workers' compensation laws and the significant impact on your benefits, seeking professional guidance will prove worthwhile. Connect with Lehmbecker Law today — our Seattle workers' compensation lawyers offer free initial consultations to review your case and ensure you receive the maximum benefits allowed.