Worker’s compensation is critical to ensuring you receive the support you need after a workplace injury or illness.
The amount of compensation you receive depends on your average weekly earnings. That means that any miscalculations when determining your average weekly earnings could lead to under or overpayment.
In this post, we’ll walk through the importance of properly calculating your average weekly wage, how insurers calculate your workers’ compensation, and what to do if you feel you aren’t receiving the compensation you deserve.
What Is Workers’ Compensation?
Workers’ compensation is an insurance program that protects you if you’re ever injured at work. It provides financial and medical benefits to help cover medical expenses, lost wages during recovery, and rehabilitation costs. Workers’ compensation is designed to protect both employees and employers by providing a structured process for managing workplace injuries, and ensuring that employees receive adequate support without resorting to legal action.
What Is Your Average Weekly Wage and Why Is It Important?
Your average weekly wage is the amount of pay you receive on average each week, and it plays a critical role in determining your workers’ compensation benefits. This wage serves as the basis for calculating how much you will receive in weekly compensation while you’re unable to work. Ensuring that your average weekly wage is accurate is essential to avoid both underpayment and overpayment situations.
If your average weekly wage is calculated too low, you may not receive enough financial support to cover your expenses during your recovery.
On the flip side, if the calculation is too high, you might receive more than you’re entitled to, which could lead to overpayment and potentially having to return the excess amount.
Neither situation is ideal, which is why it’s important to review your wage calculation carefully to ensure you receive fair compensation.
How to Calculate Your Average Weekly Wage
Calculating your average weekly wage depends on several factors, including whether your wages are regular or irregular, and whether you work multiple jobs. Below is an outline of how average weekly wages are calculated in the state of Oregon:
1. Regular Wages
If you receive a fixed income, whether that’s a salary or regular hourly wage, calculating your average weekly wage is relatively simple:
- If you earn a daily wage, multiply your daily wage by the number of days you work each week.
- If you earn a monthly salary, divide your total monthly salary by 4.35 (the average number of weeks in a month).
- If you work through a union hiring hall, your wages are calculated based on a standard 40-hour, five-day workweek.
2. Irregular Wages
If your income varies each week because of overtime, bonuses, or commissions, the process is a bit different. In this case, your employer or insurer will calculate your average weekly wage by looking at the wages you earned in the last 52 weeks before your injury. This provides a more accurate reflection of your earning potential over time.
3. Multiple Jobs
If you work more than one job, you may be able to include the wages from all your jobs in the calculation of your average weekly wage. However, you’ll need to prove that your work-related injury or illness prevents you from working at your other jobs to qualify for this inclusion. This can provide you with a more comprehensive financial safety net during your recovery.
How Do Insurers Calculate Your Weekly Earnings Compensation?
In Oregon, workers’ compensation benefits for temporary total disability are calculated as 66-2/3% (roughly two-thirds) of your average weekly wage. This means that if you are unable to work due to your injury, you will receive about two-thirds of your pre-injury earnings as compensation.
Self-Insured Employers
Some employers are self-insured, meaning they directly cover the costs of workers’ compensation instead of going through an insurance company. In these cases, employers may choose to continue paying your regular wages instead of temporary total disability benefits. If this happens, your regular paycheck will still have deductions for taxes and benefits. However, if your employer decides to reduce or stop regular payments, they will switch to paying temporary disability benefits instead.
Requesting a Hearing
If you believe you’re not receiving the correct amount of workers’ compensation, you have the right to request a hearing to challenge the decision. This process allows you to present your case and evidence which will be reviewed to determine if your compensation needs to be adjusted.
Ransom Gilbertson Martin & Ratliff Is Here for You
Dealing with a work injury can be overwhelming, especially when you’re facing uncooperative employers or insurance companies. One critical step in securing the compensation you deserve is ensuring your weekly wages are calculated correctly from the start. Errors in this calculation can lead to insufficient financial support, adding to your stress during recovery.
At Ransom, Gilbertson, Martin & Ratliff, LLP, we understand the complexities of the system and have the expertise to help. We’ll provide the legal advice, representation, and support you need to receive the benefits you’re entitled to.
Contact us today to share your story. Our consultations are always free, and you don’t pay a dime unless we win your case.
Mike grew up in a military family and attended Northwestern School of Law in Oregon, where he graduated with honors. He began practicing workers’ compensation law in 1991 and became a founding partner of Ransom & Gilbertson in 1995. With decades of experience, Mike is known as a top 1% workers’ compensation attorney and has earned Martindale-Hubbell’s highest AV rating for skill and ethics. Outside the office, he enjoys rafting, fishing, going to the beach, and spending time with his dog, Sahalie.