Source: https://evensenlawoffice.com/average-weekly-wage-analysis/
Timestamp: 2019-04-22 11:06:14+00:00

Document:
If you are injured at work, the amount of money you receive is determined, in part, by your pre-injury Average Weekly Wage. Chris Evensen explains what types of payments can be included in the calculation of your pre-injury Average Weekly Wage to enhance your award of workers’ compensation benefits.
The wages were fixed by the day, hour, or by the output of the employee, the average weekly wage shall be the wage most favorable to the employee computed by dividing by thirteen (13) the wages (not including overtime or premium pay) of said employee earned in the employ of the employer in the first, second, third, or fourth period of thirteen (13) consecutive calendar weeks in the fifty-two (52) weeks immediately preceding the injury.
The goal of KRS 342.140(d) and (e), “is to obtain a realistic estimation of what the injured worker would be expected to earn in a normal period of employment.” KRS 342.140(e) utilizes the averaging method set forth in section (d) and, “attempts to estimate what the worker’s average weekly wage would have been over a typical 13-week period in the employment by referring to the actual wages or workers performing similar work when work was available.” Id. at 821.
Subsection (e) includes the consideration of a normal 13-week period of hire so an employee’s compensation will reflect his future loss of earnings in his regular employment.
Claimant worked for a temporary agency and had only worked two job assignments: a two-week assignment in June of 2010, and a week-long assignment in August 2010, on which he suffered his August 26, 2010 injury. Claimant testified he was to be performing carpentry and concrete work and earning $18.00 per hour. The Employer offered an AWW based on hours actually worked by the claimant of $162.21. The claimant filed wage records from the Defendant demonstrating wages earned by similar employees in the 13 weeks immediately preceding the claimant’s work-related injury which showed other employees earned wages from $10.00 – $40.00 working a variety of hours.
ALJ determined had the Claimant been employed a full 13-week quarter prior to his injury, he would have averaged 25 hours per week at a rate of $18.00 per hour. The ALJ found work was available during this time period to other individuals in similar occupations. Therefore, the ALJ found an AWW of $450.00. The Board Affirmed concluding substantial evidence existed in the record to support the ALJ’s determination of AWW in this case, that being the wages the Claimant actual earned, the pay-roll records of other similar employees, and the Employer representatives testimony.
Holds shift differential is included in calculation of AWW. Curtis, Supra, stands for the proposition that the worker provides a benefit to the employer by working at undesirable times (i.e., nights and weekends), that the difference in pay for those shifts is not “premium pay”, and that it is therefore averaged in with other wages earned during “regular” shifts.
The Court of Appeals held bonuses, (a production bonus in that case), can be included in calculation of a claimant’s pre-injury Average Weekly Wage. The employer had asserted that the extra six cents per pair Ms. Baker received for pressing more than 350 pairs of pants in a forty-hour week was ‘premium pay’ and must be excluded when calculating her average weekly wage. The court rejected the argument, stating that the evidence suggested the extra payment constituted ‘output pay’ for her output above 350 pairs. Id. at 216. Relying on Durr v. Chapman, 563 S.W.2d 743 (Ky. App. 1978), the court also noted that Ms. Baker worked no extra hours and that KRS 342.140(1) (d)’s exclusion referred to ‘pay in excess of the employee’s regular hourly rate because of the extra hours worked.’ Id. (emphasis original).
Wages do not include amounts paid for profit-sharing bonuses.
The Board also held, a yearly salary is to be divided by 52, regardless of when the wage earner actually works and earns the salary. Thus, in this case, the bonus is counted in the year it is earned.
Jewell v. Ford Motor Co., 2013-CA-000850-WC, rendered 4/11/14 (Designated To Be Published).
Claimant, a Ford worker, was laid off for periods of time during the 52-week period prior to his injury. While laid off, Claimant would draw unemployment benefits and also Ford applies for state unemployment benefits on behalf of its workers and pays Supplemental Unemployment benefits (SUB) pursuant to a collective bargaining agreement. The combination of unemployment and SUB pay brings an employee to about 95% of their standard wage while laid off. The holding found Unemployment benefits cannot be included, because they are not, “money payments for services rendered.” However, Unemployment SUB-payments are included as they are more like “wages” than fringe benefits because it is a form of bargained-for pay, which Ford paid directly to the claimant, accounted for on a W-2 with taxes withheld and a part of an overall payment scheme to retain employees.
The Court of Appeals found fringe benefits such as employee pension fund contributions, health insurance benefits, and life insurance were not intended to be included pursuant to KRS 342.140 as “wages” on the basis that they did not fall within the class of “similar advantages received from the employer” such as board, rent, housing, or lodging.
Fringe benefits such as employer pension plan contributions, health insurance benefits, life insurance premiums and the value of training and control are similarly excluded from being wages.
In Brooks v. Tri State Industrial Services, Inc., WCB # 2006-97477, (Rendered 4/30/09), the Workers’ Compensation Board concluded vacation pay is a monetary payment for services rendered and therefore must be included in the calculation of AWW. In support of this conclusion, the Board noted the money received as vacation pay is treated in all ways as regular income for tax purposes, the employee earns vacation pay through work during the entire year, and it is paid at the regular rate the employee earns while working.
Jones Truck Lines, Inc. v. Billy Rogers Janes, WCB #s 92-07244, 85-27639, 84-02855, 83-11026, & 82-36515, (Rendered 6/17/94).
Holiday pay is included in calculation of AWW.
For the purposes of calculating Average Weekly Wage, wages include shift differential which is part of an employee’s regular pay. Wages include vacation and holiday pay since, for tax purposes, such pay is considered income.
Anderson v. Homeless & Housing COA, 135 S.W.3d 405, 413 (Ky. 2004).
The term “wages” has been held to only include items that are reported on an employee’s income tax return.
Under KRS 342.0011(17) and KRS 342.140(6), the term “wages” takes into account items that are reported on the employee’s income tax returns. It includes money; the reasonable value of board, rent, housing, lodging, fuel or other “similar advantage” from the employer; and any “gratuities received in the course of employment” from individuals other than the employer.
Claimant, a truck driver, argued expenses listed on her Schedule C, (meals and depreciation), should not be deducted from gross receipts since they were available for her to spend at her discretion while deductions for fuel and other direct expenses were not. The ALJ added the meals and depreciation allowance back into the net profit for determination of AWW. While the case was remanded for a calculation pursuant to KRS 342.140(1)(f), the Court did not indicate the ALJ should not have added these back in. Instead, the Court reversed the ALJ findings, holding he should have used KRS 342.140(1)(f).
Jackson v. Gentiva Health Services, 2013-CA-000549-WC, (Rendered 12/20/13), Designated Not to Be Published.
Cannot consider mileage reimbursement as part of wages if it was not reported for income tax purposes.
The Kentucky Supreme Court set forth guides in analyzing pre-and post-injury wages. The Court noted the legislature intended a comparison of pre-and post-injury average weekly wage, not a comparison of the claimant’s pre-and post-injury hourly pay rate. Id. at 117, see also Whitaker v. Robinson, 981 S.W.2d 118 (Ky. 1998). Next, the Court held the legislature did not contemplate a weekly review of a worker’s earnings and a weekly adjustment of benefits. Id. at 117. Instead, the Court held the former KRS 342.730 (1)(c)(2) provided for a comparison of pre-and post-injury average weekly wages. Id. at 118.
Thus, for an employee who is paid hourly, as Garcia, her post-injury average weekly wage must be calculated pursuant to KRS 342.140(1)(d) to determine whether there has been a return to work at a higher wage. This calculation requires an analysis of Garcia’s earnings over a fifty-two weeks period, and identification of her “best” quarter, the wage was $477.92, higher than the pre-injury wage of $474.28. For this reason, we are satisfied the ALJ conducted the analysis required by Ball and reached a result supported by substantial evidence.
Entitlement to the double multiplier is not determined on a post-injury quarter by quarter basis.
(4)	The post-injury AWW as determined by the ALJ is equal to or greater than the claimant’s AWW at the time of the injury.
2.	If an employee has worked two full quarters and a partial third quarter (10-weeks), do you have to start counting weeks from the date of injury and work backwards? Or, can you start from date of hire and work forward?

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.