To determine whether the workers’ compensation carrier is paying you the correct temporary disability rate you must first calculate your “average weekly wage,” including overtime. Take a look at your paystub. Do you make the same amount every week or does your salary vary? If you earn an annual salary, your weekly wage should be the same every week. Your temporary disability rate is thus easy to compute at 70% of your gross weekly wage before tax.
If your wages vary every week, your rate is based upon your average gross earnings, which is generally, although not always, computed over the six (6) month period immediately preceding the date of the accident. If you work in an industry which is busier during one part of the year than another, it may be more appropriate to utilize a 12 month period to compute the average wage.
At a minimum, gather all of your paystubs for at least the last twenty-six (26) weeks prior to the accident, to compute your average pre-tax wage. If you started working for this employer less than 6 months before the accident, use the entire period of employment. Do not include the week of the accident if you only worked a partial week due to your injuries. Likewise, if you took unpaid leave during that period, do not include those weeks when calculating your average wage. It is common for insurance carriers to mistakenly include these unpaid weeks, which thereby lowers your rate unfairly. However, you cannot exclude those weeks in which you simply worked fewer hours, just as the carrier cannot exclude those weeks when you worked more overtime than usual.
Once you have obtained a sufficient number of paystubs prior to the accident date, which accurately depict your average wages, get out your calculator. Total the wages you earned before taxes and other deductions, and then divide the total by the number of weeks worked during that period. This number, representing your average weekly wage, will determine your temporary disability rate. The workers’ compensation carrier should be paying you 70% of your average weekly wage during the time you are medically unable to perform your job, up to the State maximum rate in the year the accident occurred.