Employees who are injured in the course and scope of their employment are only entitled to weekly wage loss benefits and medical benefits. To determine the correct amount of weekly wage loss benefits payable to given individuals, their average weekly wage must be calculated. When an injured worker does not have a fixed income or salary, the Pennsylvania Workers’ Compensation Act focuses on the amount of time the employee actually worked for the employer immediately preceding the work incident and the amount of wages earned during that period of time. Under these circumstances, where varied wages are involved, the act has delineated three different methods for calculating an individual’s average weekly wage.
For long-term employees, the earnings used to calculate the average weekly wage are taken from three of the four highest periods of 13 weeks immediately preceding the date of injury. However, for injured workers who have not been employed for at least three consecutive periods of 13 weeks, the earnings for any completed period of 13 weeks immediately preceding the date of injury are used in calculating the average weekly wage.
Newly hired employees who have worked less than 13 weeks for their employers leading up to the date of injury are permitted to use their hourly rate multiplied by the number of hours they expected to work to determine their correct average weekly wage.
It is important to know what is considered “wages” when computing an individual’s average weekly wage. Money advanced or reimbursed to an employee for board and lodging, profit-sharing payments and exercised stock options may constitute wages. Bonuses are considered wages for the purpose of computing the average weekly wage and are usually prorate over the entire year. Overtime pay must be included as wages, as well as vacation pay, which is attributed to the entire year and prorated accordingly.
It is a well-established principle that these calculations are supposed to reflect a realistic measure of what an employee could have expected to earn had he not been injured, this is not always the case.
The maximum allowable compensation rate is $932 per week. Therefore, if an employee earned more than $1,400 per week prior to sustaining a work-related injury, the maximum amount of money that individual could receive in workers’ compensation benefits would be $932 per week.