When you are injured at work, your workers’ compensation benefits will depend on your average weekly wage. It’s essential that you understand how to calculate your Pennsylvania average weekly wage so you know what to expect in workers’ compensation benefits while you cannot work. Because you should confirm your Pennsylvania average weekly wage calculation is correct due to its impact on a potential workers’ comp settlement, it is best to work with an experienced workers’ compensation attorney.
Definition of Average Weekly Wage (AWW)
The average weekly wage (AWW) is calculated based on the income you earn from all sources. Under the Pennsylvania Workers’ Compensation Act, employees can receive two-thirds of the weekly wage as wage loss benefits when they sustain an injury at work that prevents them from working. However, the Act establishes minimum and maximum adjustments, with a maximum weekly compensation rate set by the Department of Labor and Industry.
In 2024, the Department established $1,325.00 as the maximum benefit per week. What does this statewide average weekly wage maximum amount mean for injured workers? No matter an employee’s average weekly wage, they cannot receive more than $1,325.00 per week. According to the current Pennsylvania workers’ compensation rate schedules, if your average weekly wage falls between $736.11 and $993.75, you would receive $662.50, half of the maximum weekly compensation rate. If your AWW is $736.10 or below, you will receive ninety percent of your average weekly wage as weekly compensation. If your AWW is $993.76 or higher, your weekly compensation rate would be 66 ⅔ percent of your average weekly wage, up to the maximum compensation amount.
Note that the average weekly wage is set at the time of your injury. In other words, it will not change if you receive a raise or cost of living adjustment.
Components of Average Weekly Wage Calculation
The calculation of the average weekly wage depends primarily on your pre-injury earnings for all the jobs you worked at the time of injury. However, the fringe benefits you receive can also affect your weekly benefit compensation rates.
Specifically, the AWW calculation includes your wages, overtime pay, vacation pay, bonuses, and room and board if your employer pays those expenses. If you earn tips and report them on your federal income tax returns, these can also be included. Concurrent employment wages are included, as well.
Understanding the components of your average weekly wage calculation also means identifying what is not included. The following are excluded when calculating your AWW:
- Employer contributions to retirement plans or health insurance
- Unemployment benefits
- Income from independent contractor work
- Vacation time paid after the work-related injury
- Veterans and Social Security benefits
- Business expenses, including mileage reimbursements
How to Calculate AWW in Pennsylvania
How you calculate an injured employee’s average weekly wage depends on the nature of their employment. Specifically, whether someone earns an hourly wage or salary dictates the AWW calculation. For salaried employees who are injured on the job, their annual salary is divided by 52 weeks to determine their average weekly wage. Hourly workers are treated differently. Their AWW depends in part on the length of their employment.
The compensation rate for injured hourly workers is based on their pre-tax gross wages. The wages earned by an hourly employee for the 52 weeks before the injury are divided into four thirteen-week “quarters.” The AWW is calculated by taking the three highest quarters (discarding the lowest quarter) immediately preceding the date of injury, dividing those top three quarters by thirteen, and then dividing by three to arrive at the average weekly wage.
If the injured worker hasn’t been employed by the company for three consecutive quarters when the injury occurred, their AWW is determined by dividing their total wages for any completed quarter by thirteen. If the worker had not yet worked thirteen weeks when injured on the job, the AWW is calculated by multiplying their hourly rate by the hours worked or expected to be worked in a week.
The calculation for seasonal employees varies to account for fluctuating seasonal work. Seasonal and voluntary emergency workers are treated differently for purposes of AWW calculations.
At Calhoon & Kaminsky, P.C., we understand how confusing calculating your AWW can be. However, you can count on a skilled and knowledgeable work comp attorney from our firm to ensure your average weekly wage calculation is correct.
Relevant Time Periods to Consider
The periods when hourly employees work for employers when their injury occurs are critical to determining the AWW. Employers must look back to the four thirteen-week periods before the injury occurred. Sporadic or concurrent work also makes average weekly wage calculations more complicated, and the workers’ comp insurance company can cause errors in those calculations, which can affect the benefit rate the injured employee receives.
Impact of AWW on Workers’ Compensation Benefits
Correctly calculating your average weekly wage is critical to receiving the correct workers’ comp weekly benefits and settlement. As noted above, your AWW dictates your weekly compensation as set by the Pennsylvania Department of Labor. Your final settlement value could be less if the AWW is incorrectly calculated. For example, if your average weekly wage was calculated as less than $736.10 rather than within the $736.11 – $993.75 range, you would receive a lower weekly compensation payment, and your overall settlement would be less since the weekly compensation was incorrect.
In addition, your AWW will be used to calculate any specific loss benefits. If your AWW is incorrectly calculated, your specific loss benefits will be incorrect.
At Calhoon & Kaminsky, P.C., we know that every dollar counts when trying to support yourself and cover your expenses when you are off work. We want to work with you to ensure that the workers’ comp insurance company includes all your income to properly calculate your average weekly wage so your potential settlement number is accurate.
Contact Our Pennsylvania Workers’ Comp Lawyers for Help
We understand how difficult it is when an injury on the job affects your ability to work. Calhoon & Kaminsky, P.C. workers’ compensation attorneys will work hard to calculate your AWW correctly and get you the benefits you’re entitled to. We’ll answer all your questions about the workers’ comp process. Call us today to speak to an experienced workers’ comp attorney in a free case review.
This post was originally published in June 2011 and has been updated for accuracy and comprehensiveness in November 2024.
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For more than 20 years, our attorneys have been helping injured workers navigate the complex Pennsylvania workers’ compensation system. We empower workers with the information and the representation they need to make the best decisions for themselves and their families’ future.
