What is an Average Weekly Wage?
The Average Weekly Wage (AWW) is exactly what it sounds like! It is the claimant’s average weekly wage over a one-year period. The AWW is calculated by reviewing the employee’s payroll data from the previous year using their W-2 and/or pay-stubs.
If the injured worker has been employed for less than a year or if the injured worker did not work for a major portion of the preceding year, then the employer will look at what a similar worker made over that time period. A similar worker payroll allows the Court to consider wages from an employee that is similarly situated to a claimant. However, there are other questions that insurance carriers and employers need to consider when calculating the AWW.
Specifically, was the injured worker a full-time, part-time, or seasonal worker? Did the employee have multiple employers or work multiple jobs? Is the employee claiming additional money received such as tips? Was the employer aware of additional money received for services outside the employment agreement or contract? Was the employee a minor or under the age of 25? These questions can help a carrier and their counsel figure out whether to use a “260 multiplier” or some other calculation which is more befitting of the injured worker.
The questions above are just some of the issues insurance carriers and employers need to be aware of when determining the AWW. Depending on the circumstances of each case, understanding these questions can make the difference in calculating a higher or lower AWW. It is important that the AWW is properly calculated, otherwise, the insurance carrier or employer may end up paying far more to the employee than what is required by the law.