Your average weekly wage is the single most important number in your workers’ compensation benefit calculation. Every dollar of your weekly benefit is derived from it. Every week you are out of work, the amount you receive is based on it. If the average weekly wage is calculated correctly, your benefits reflect your actual earning capacity. If it is calculated incorrectly — or if the insurance carrier uses a lower figure than your earnings support — you receive less than you are entitled to for the entire duration of your claim.
The average weekly wage, or AWW, is not simply your hourly rate multiplied by your hours. It is a calculation that takes into account the full picture of your earnings, and in many cases, it includes income sources that workers do not realize they can claim. This article explains how the AWW is determined, what income is included, and what to do when the calculation is disputed.
The standard calculation
The general method for calculating the AWW is to take your total earnings over the 52 weeks preceding the injury and divide by 52. This produces a weekly average that accounts for seasonal fluctuations, slow weeks, overtime weeks, and other variations in pay. The 52-week lookback is the default, but the Board may use a different period if it more fairly represents your earning capacity.
If you were employed for fewer than 52 weeks before the injury, the Board may calculate the AWW using the actual period of employment. If you were employed for 30 weeks, the Board may divide your total earnings by 30. If you were employed for only a few weeks, the Board may look at what a similar employee in the same role was earning to establish a fair AWW.
The calculation is designed to reflect what you were actually earning, not what you were theoretically capable of earning. But in certain situations — particularly for workers under age 25 and for workers whose earnings were expected to increase — the Board has discretion to adjust the calculation upward.
What income counts toward the average weekly wage
The AWW includes your base wages — hourly pay, salary, or piece rate. But it also includes several categories of additional income that workers frequently overlook or that the insurance carrier may not include in its initial calculation.
Overtime pay is included if overtime was a regular part of your employment. If you worked overtime most weeks or during predictable busy seasons, that overtime income should be factored into the AWW. Occasional, sporadic overtime may not be included, but consistent overtime should be. The distinction between regular and sporadic overtime is a common point of dispute.
Tips are included if you received them as a regular part of your compensation. Restaurant servers, bartenders, delivery drivers, and other tipped workers should have their tip income reflected in the AWW. The challenge is documentation. If tips were reported on tax returns, the documentation exists. If they were not, establishing the amount of tip income requires other evidence — testimony, bank deposits, credit card tip records from the employer.
Commissions are included as part of the AWW. For workers whose compensation is entirely or partly commission-based, the AWW should reflect the actual commissions earned over the lookback period. Because commission income can vary significantly from week to week, the 52-week average is particularly important for smoothing out the fluctuations.
The cash value of board and lodging provided by the employer is included. If your employer provided housing or meals as part of your compensation, the fair market value of that benefit is added to your wages for AWW purposes. This is common for live-in home health aides, building superintendents, and agricultural workers.
Car allowances and other regular non-wage compensation may also be included, depending on the circumstances.
Concurrent employment
If you held more than one job at the time of the injury, income from all concurrent employment may be included in the AWW calculation. This is an important provision that many workers and even some attorneys overlook. A worker who earned $500 per week at the job where the injury occurred and $300 per week at a second job may have an AWW of $800 rather than $500. The difference translates directly into a higher weekly benefit.
To include concurrent employment income, you must provide evidence that you held both jobs at the time of the injury. Pay stubs, tax returns, or other documentation from the second employer establishes the concurrent employment. If the second job was off the books, bank deposits or other evidence of income may be needed.
The under-25 provision
Workers’ Compensation Law Section 14(6) provides a special calculation for workers who are under age 25 at the time of the injury. If the worker was in a position where wages would reasonably be expected to increase over time, the Board may calculate the AWW based on the earnings the worker would have achieved had they continued working, rather than on the wages they were actually earning at the time of the injury.
This provision exists because a 22-year-old apprentice electrician earning $600 per week may be on a trajectory to earn $1,200 per week within a few years. Calculating benefits based solely on the $600 entry-level wage fails to account for the earning capacity that was lost. The under-25 provision allows the Board to recognize that trajectory and adjust the AWW accordingly.
Establishing the wage progression requires evidence — the terms of an apprenticeship agreement, the employer’s pay scale, testimony from the employer about typical progression, or industry data about earnings at different experience levels. The adjustment is not automatic. It must be requested and supported with documentation.
Establishing the AWW when you were paid off the books
Workers who were paid in cash without formal payroll records face the most difficult AWW determinations. There are no pay stubs. There is no W-2. There may be no tax return reflecting the income. Without these standard documents, the AWW must be established through other evidence.
Bank deposit records are often the strongest alternative evidence. Regular cash deposits of consistent amounts can establish a pattern of income that the Board may rely on. Text messages or emails discussing pay — “I’ll pay you $800 this Friday” — are direct evidence of the wage arrangement. Testimony from co-workers about what they and the injured worker were paid can establish the going rate. Receipts, invoices, or any written record of payment can contribute to the picture.
The Board understands that off-the-books workers do not have the same documentation that payroll employees have. The standard is not perfection. It is sufficient evidence to establish the wage with reasonable certainty. But the less documentation you have, the harder the determination becomes, and the more likely it is that the final AWW will be lower than what you actually earned. Keep whatever records you can. Start now if you have not already.
Common disputes about the average weekly wage
The insurance carrier’s initial AWW calculation may not include all the income you are entitled to credit. The most common omissions are overtime that was regular but not reflected in the carrier’s calculation, tip income that was earned but not formally reported, income from concurrent employment that the carrier was not aware of, and the cash value of board and lodging.
If you believe the carrier’s AWW calculation is too low, gather your wage documentation and raise the issue. The AWW can be contested at a hearing before a Workers’ Compensation Law Judge. Present your pay stubs, tax returns, bank records, and any other evidence of earnings. The judge will review the evidence and determine the appropriate AWW.
Do not accept an incorrect AWW without challenge. The difference compounds over time. A $100 per week understatement in the AWW translates to roughly $67 per week less in benefits. Over a year, that is more than $3,400. Over the life of a multi-year claim, the impact is substantial.
How Schwartzapfel Holbrook addresses average weekly wage issues
At Schwartzapfel Holbrook, we review the AWW calculation in every workers’ compensation case. That review includes examining pay records for overtime, tips, commissions, and other income the carrier may have excluded. We identify concurrent employment income that should be included. For workers under 25, we evaluate whether the Section 14(6) wage progression provision applies. For off-the-books workers, we help gather alternative wage evidence and present it at a hearing.
The AWW is not a number you can afford to get wrong. It drives your weekly benefit for the entire duration of your claim. Getting it right at the outset is one of the most impactful things an attorney can do in a workers’ compensation case.
Schwartzapfel Holbrook / Fighting For You