Calculating Average Weekly Wage in New York Claims

Why is Average Weekly Wage important?

One of the most fundamental aspects of workers’ compensation are the indemnity benefits paid to the injured workers. The purpose is to compensate the injured employee for the time lost from their work due to their on-the-job injury. These benefits are tax exempt, and as such are calculated at a 33% reduction from the employee’s gross salary amount subject to a maximum and minimum which changes every year. The means by which the compensation rate is established is based on the Average Weekly Wage (AWW). This AWW becomes the basis for all monetary calculations the Workers’ Compensation Board will make throughout the duration of the claim.  As such, it is important that the AWW is properly calculated at the outset of the claim.

The Calculation.

Several factors are considered when making the AWW calculation. Has this injured worker been employed for at least 52 weeks prior to the date of injury? If they have, then their gross salary for that 52 week period will serve as the basis for the AWW calculation. If however, they were employed for less than 52 weeks prior to their injury, then the payroll records of another employee will be directed for submission to the Board. In this instance, the similar worker should be in the same field and preferably in the same position, earning similar wages as the injured worker. The similar worker’s salary and days worked will be adapted and applied in calculating  the injured employee’s AWW.

The employer and/or carrier should submit a C-240 form to the Board which should list the gross salary of the injured employee, or similar worker, for 52 weeks immediately prior to the date of accident. The C-240 should also have the number of days that employee worked in that 52 week period listed.

Multipliers used.

Generally, the Board will use a ‘260 multiplier’ when calculating the AWW of any employee who has worked 5 days per week or one that has worked between 234 and 260 days in that 52 week period. Here is an illustration of how that calculation will look like for an employee with gross earnings of $50,000 with 250 days worked in a 52 week period:

$30,000 (gross salary) / 250 (days worked in a 52 week period) = $120 (average daily wage)

$120 * 260 multiple = $31,200 (adjusted gross income)

$31,200 / 52 weeks = $600 Average Weekly Wage

For a seasonal employee, like a school bus driver, construction worker, landscaper or even a sales associate hired for the busy holiday season, the Board will likely apply the ‘200 multiplier’ in calculating the average weekly wage. Here is an illustration of the use of the 200 multiplier for a seasonal employee with a $30,000 annual salary and who worked 120 days:

$30,000 (gross salary) / 120 (days worked in a 52 week period) = $250 (average daily wage)

$250 * 200 multiple = $50,000 (adjusted gross income)

$50,000 / 52 weeks = $961 Average Weekly Wage

If the employee worked anywhere between 261 and 299 days, then the AWW will be calculated without a multiplier by using a straight division method. As such, an employee who worked a total of 285 days in that 52 week period immediately prior to the date of injury,  with a $30,000 gross salary would be entitled to $576.92 in AWW.

$30,000 (gross salary) / 52 weeks = $576.92 AWW

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Rachel Aronov is an associate attorney at Lois LLC where she defends employers and carrier in New York workers’ compensation claims. Rachel can be reached directly at raronov@lois-llc.com or 201-880-7213.