Understanding Average Weekly Wages in Maine Workers' Compensation Act

 
Calculating
Calculating
 
 
Average Weekly
Average Weekly
Wages
Wages
 
Rev  5-2-2017
 
What is “Average Weekly Wage?”
What is “Average Weekly Wage?”
 
“Our statutory scheme provides a method of
predicting what the employee would continue to
earn had no injury occurred.” – Landry v. Bates
Fabric Inc.
 
“Our workers’ compensation system…seeks to
estimate what the employee would be earning
during the time of his disability were he not
injured.” – Coffin v. Hannaford Bros. Co.
 
“Fair and reasonable…”
Maine Workers’ Compensation
Maine Workers’ Compensation
Act, Section 102(4)
Act, Section 102(4)
 
A.
Regular workweek and consistent
earnings, or salary
 
B.
Irregular workweek, or employed less
than 200 workdays
 
C.
Seasonal employment
 
D.
Everybody else
 
“Three pigeon holes
“Three pigeon holes
and a black hole…”
and a black hole…”
 
Apply each method  - §102(4)(A), (B),
and (C) - in order.
 
If one does not apply, or does not
produce a “fair and reasonable” AWW,
move to the next one.
 
If neither A, B, nor C produce a fair and
reasonable AWW, use §102(4)(D).
Section 102(4)(A)
Section 102(4)(A)
 
Regular workweek with consistent
earnings, or paid a salary
 
Must have worked at least 200 full
working days
“…the amount that the employee was receiving
at the time of the injury for the hours and days
constituting a regular full working week…”
Section 102(4)(A)
Section 102(4)(A)
 
AWW = weekly pay (salary, etc.) at
time of injury
 
Not applicable to “employees
whose wages during that year
have generally varied from week
to week” – move to subsection B
Section 102(4)(B
Section 102(4)(B
)
)
 
Use for employees “whose wages
during that year have generally varied
from week to week”
 
-OR-
 
 
 
 
 
“When the employment or occupation
did not continue pursuant to paragraph
A for 200 full working days”
 
Section 102(4)(B)
Section 102(4)(B)
 
AWW = “the entire amount of wages or
salary earned by the injured
employee during the immediately
preceding year divided by the total
number of weeks, any part of which
the employee worked during the
same period”
 
Section 102(4)(B)
Section 102(4)(B)
 
Do not include earnings from week-of-
injury if they reduce the AWW
 
Do not include earnings from week-of-
hire if they reduce the AWW
 
Do not include weeks with no earnings
 
Section 102(4)(C)
Section 102(4)(C)
 
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Section 102(4)(C)
Section 102(4)(C)
 
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Section 102(4)(C)
Section 102(4)(C)
 
Includes “any employee who is
employed directly in agriculture” (see
§102(2)) “or in the harvesting or initial
hauling of forest products” (loggers and
log haulers), regardless of weeks
worked, and
 
All others who work (
seasonally
) no
more than 26 weeks per year
Section 102(4)(C)
Section 102(4)(C)
 
 
AWW = gross earnings for 
prior
calendar year
 divided by 52
weeks
 
o
Include earnings from all employment
 
o
Do not use if employee was not
“seasonal” in prior calendar year
Section 102(4)(C)
Section 102(4)(C)
 
 
Seasonally employed” examples:
Ski instructor
Lifeguard
Waiter/waitress at seasonal
restaurant
Cook at summer camp
Cashier at seasonal amusement
park
Section 102(4)(D)
Section 102(4)(D)
 
For those situations where (A), (B) or (C)
can not be “reasonably and fairly
applied”
 
Commonly referred to as the “fallback
provision”
 Section 102(4)(D)
 Section 102(4)(D)
 
  
AWW = ? (you decide)
 
  Consider the “previous wages,
earnings or salary of the injured
employee and of other employees of
the same or most similar class
working in the same or most similar
employment in the same or a
neighboring locality”
 
 
Section 102(4)(D)
Section 102(4)(D)
 
 
Consider employee’s past wages
 
Consider wages of at least 2
comparable employees
 
Use your own judgment to calculate an
AWW that is “fair and reasonable”
 
You may want to consider obtaining a
WCB-4A Consent
 
 
 
Maine Workers’ Compensation
Maine Workers’ Compensation
Act, Section 102(4)
Act, Section 102(4)
 
A.
Regular workweek and consistent
earnings, or salary
 
B.
Irregular workweek, or employed
less than 200 workdays
 
C.
Seasonal employment
 
D.
Everybody else
 
Section 102(4)(E)
Section 102(4)(E)
Concurrent Employment
Concurrent Employment
 
Calculate AWWs from each employer
and add them together
 
Need not use the same method to
calculate AWW for all employers (see
Harrigan v. Maine Veterans Home
)
 
Employment relationship must exist at
the time of the injury (see 
Plourde v.
Plourde
)
Section 102(4)(F)
Section 102(4)(F)
Expenses
Expenses
 
Reimbursement of expenses incurred by
the employee in the course of his/her
employment are not included in AWW
 
Examples: mileage reimbursement,
meals, tolls, lodging, etc. incurred by
employee and reimbursed by employer
Section 102(4)(G)
Section 102(4)(G)
Prior Injuries
Prior Injuries
 
The fact that the employee suffered a
previous injury does not preclude
compensation for a later injury or death
 
In determining compensation for the later
injury, the employee’s AWW will represent
the earning capacity at the time of the
later injury, in the employment he/she was
working at that time (unless the prior injury
affects the later employment)
 
Section 102(4)(G)
Section 102(4)(G)
Prior Injuries 
Prior Injuries 
(continued)
(continued)
 
In calculating the AWW for the subsequent
injury, be sure to exclude any weeks in
which the employee received workers’
compensation benefits from the prior
injury
 
Those weeks with WC payments should be
on the wage statement, with a note that
they were excluded in the AWW
calculation
 
Section 102(4)(H)
Section 102(4)(H)
Fringe Benefits
Fringe Benefits
 
Examples of fringe benefits include
health insurance, 401-Ks, and employer-
provided meals, housing, and cars.  See
Rule 1.5.
 
Fringe benefits that continue to be paid
by the employer are not included in
AWW calculation
 
Form WCB-2B – Fringe Benefits
Worksheet
 
 
 
 
 
 
 
 
 
 
 
102(4)(H) - 
102(4)(H) - 
Fringe Benefits
Fringe Benefits
(continued)
(continued)
 
Any fringe benefits that 
do not 
continue
to be paid by the employer during the
disability must be included in AWW
calculation – 
but
 -
 
Those fringe benefits are only included
to the extent that their inclusion will not
result in a weekly benefit greater than
2/3 of the SAWW at the time of injury
 
102(4)(H) – Fringe Benefits
102(4)(H) – Fringe Benefits
(continued
(continued
)
)
 
Partial Benefit calculation steps:
 
1.
 
Use AWW 
with
 fringes to calculate benefits
due (
benefit amount cannot exceed 2/3 of the
SAWW 
at the time of injury
)
 
2.
 
Use AWW 
without
 fringes to calculate the
benefits due (
cannot exceed 
current
 max rate)
 
3.
 
Compare the benefits above and pay the
greater
 of the two amounts calculated above
Other AWW issues - Bonuses
Other AWW issues - Bonuses
 
Generally includable if performance based
and/or part of the “pay package”
 
Examples of includable bonuses:
Sales or production based incentives
Commissions
Safe driving bonuses for truckers
Annual profit sharing or Christmas bonuses
 
“One time” bonuses and awards generally 
not
includable
 
Other AWW issues
Other AWW issues
- Pre-paid vacation time
- Pre-paid vacation time
 
Pre-paid vacation time is includable in AWW calculation
to the extent it is used in the 52-week period covered by
the wage statement
 
Example:
Employee receives 4 weeks pre-paid vacation pay
for the year on January 2
EE uses a week in January and a week in February
EE injured in April and out on TTD
Include 2 of the 4 weeks on the wage statement to
cover the “zero” weeks in January & February
Explain in the comments section
 
 
Other AWW issues -
Other AWW issues -
Change in employment status
Change in employment status
 
AWW should reflect “weekly earning capacity of the
injured employee in the employment in which the
employee at the time of the injury was working.”
 
Factors such as promotions, demotions, change from
part-time to full-time (or vice versa) 
may
 affect AWW
calculation
 
Use only those wages after the change in status
 
Still fill in all weeks, note calculation method in
comment section
 
 
Other AWW issues -
Other AWW issues -
Payment in lieu of benefits
Payment in lieu of benefits
 
Examples:
 
Employee receives an extra $5.00 per hour to
purchase optional benefits, but chooses not to
purchase them
 
Employee opts out of health care plan and is paid
a monthly amount regardless of hours worked
 
These payments would be included on the wage
statement as wages, not on the fringe benefit
worksheet as fringes
 
 
 Other AWW issues -
 Other AWW issues -
Tipped Employees
Tipped Employees
 
Earnings for tipped employees, such as servers,
bartenders, taxi drivers, etc., include tips.  Reported tips
must be included on the Wage Statement as earnings.
 
Example – a waitress works 40 hours at $3.75  per hour
and reports tips of $200.00 for that week.  The wage
statement should show earnings for the week of
$350.00 (40 hours at $3.75=$150, plus $200 of reported
tips).
 
Claim administrators should be verifying the inclusion of
reported tips when submitting the Wage Statement.
 
Calculating Average
Calculating Average
Weekly Wages
Weekly Wages
 
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Average Weekly Wage calculations under the Maine Workers Compensation Act are crucial for determining benefits for injured employees. The Act provides different methods based on regular, irregular, and seasonal employment to estimate what the employee would have earned if not injured. These calculations ensure fair compensation by considering various factors such as consistent earnings, salary, and workdays. Applying the designated methods in order helps determine a fair and reasonable Average Weekly Wage for injured workers.


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  1. Calculating Average Weekly Wages Rev 5-2-2017

  2. What is Average Weekly Wage? Our statutory scheme provides a method of predicting what the employee would continue to earn had no injury occurred. Landry v. Bates Fabric Inc. Our workers compensation system seeks to estimate what the employee would be earning during the time of his disability were he not injured. Coffin v. Hannaford Bros. Co. Fair and reasonable

  3. Maine Workers Compensation Act, Section 102(4) A. Regular workweek and consistent earnings, or salary B. Irregular workweek, or employed less than 200 workdays C. Seasonal employment D. Everybody else

  4. Three pigeon holes and a black hole Apply each method - 102(4)(A), (B), and (C) - in order. If one does not apply, or does not produce a fair and reasonable AWW, move to the next one. If neither A, B, nor C produce a fair and reasonable AWW, use 102(4)(D).

  5. Section 102(4)(A) the amount that the employee was receiving at the time of the injury for the hours and days constituting a regular full working week Regular workweek with consistent earnings, or paid a salary Must have worked at least 200 full working days

  6. Section 102(4)(A) AWW = weekly pay (salary, etc.) at time of injury Not applicable to employees whose wages during that year have generally varied from week to week move to subsection B

  7. Section 102(4)(B) Use for employees whose wages during that year have generally varied from week to week -OR- When the employment or occupation did not continue pursuant to paragraph A for 200 full working days

  8. Section 102(4)(B) AWW = the entire amount of wages or salary earned by the injured employee during the immediately preceding year divided by the total number of weeks, any part of which the employee worked during the same period

  9. Section 102(4)(B) Do not include earnings from week-of- injury if they reduce the AWW Do not include earnings from week-of- hire if they reduce the AWW Do not include weeks with no earnings

  10. Section 102(4)(C) Employment based on the seasons

  11. Section 102(4)(C) Notwithstanding paragraphs A and B, the average weekly wage of a seasonal worker is determined by dividing the employee's total wages, earnings or salary for the prior calendar year by 52

  12. Section 102(4)(C) Includes any employee who is employed directly in agriculture (see 102(2)) or in the harvesting or initial hauling of forest products (loggers and log haulers), regardless of weeks worked, and All others who work (seasonally) no more than 26 weeks per year

  13. Section 102(4)(C) AWW = gross earnings for prior calendar year divided by 52 weeks o Include earnings from all employment o Do not use if employee was not seasonal in prior calendar year

  14. Section 102(4)(C) Seasonally employed examples: Ski instructor Lifeguard Waiter/waitress at seasonal restaurant Cook at summer camp Cashier at seasonal amusement park

  15. Section 102(4)(D) For those situations where (A), (B) or (C) can not be reasonably and fairly applied Commonly referred to as the fallback provision

  16. Section 102(4)(D) AWW = ? (you decide) Consider the previous wages, earnings or salary of the injured employee and of other employees of the same or most similar class working in the same or most similar employment in the same or a neighboring locality

  17. Section 102(4)(D) Consider employee s past wages Consider wages of at least 2 comparable employees Use your own judgment to calculate an AWW that is fair and reasonable You may want to consider obtaining a WCB-4A Consent

  18. Maine Workers Compensation Act, Section 102(4) A. Regular workweek and consistent earnings, or salary B. Irregular workweek, or employed less than 200 workdays C. Seasonal employment D. Everybody else

  19. Section 102(4)(E) Concurrent Employment Calculate AWWs from each employer and add them together Need not use the same method to calculate AWW for all employers (see Harrigan v. Maine Veterans Home) Employment relationship must exist at the time of the injury (see Plourde v. Plourde)

  20. Section 102(4)(F) Expenses Reimbursement of expenses incurred by the employee in the course of his/her employment are not included in AWW Examples: mileage reimbursement, meals, tolls, lodging, etc. incurred by employee and reimbursed by employer

  21. Section 102(4)(G) Prior Injuries The fact that the employee suffered a previous injury does not preclude compensation for a later injury or death In determining compensation for the later injury, the employee s AWW will represent the earning capacity at the time of the later injury, in the employment he/she was working at that time (unless the prior injury affects the later employment)

  22. Section 102(4)(G) Prior Injuries (continued) In calculating the AWW for the subsequent injury, be sure to exclude any weeks in which the employee received workers compensation benefits from the prior injury Those weeks with WC payments should be on the wage statement, with a note that they were excluded in the AWW calculation

  23. Section 102(4)(H) Fringe Benefits Examples of fringe benefits include health insurance, 401-Ks, and employer- provided meals, housing, and cars. See Rule 1.5. Fringe benefits that continue to be paid by the employer are not included in AWW calculation Form WCB-2B Fringe Benefits Worksheet

  24. 102(4)(H) - Fringe Benefits (continued) Any fringe benefits that do not continue to be paid by the employer during the disability must be included in AWW calculation but - Those fringe benefits are only included to the extent that their inclusion will not result in a weekly benefit greater than 2/3 of the SAWW at the time of injury

  25. 102(4)(H) Fringe Benefits (continued) Partial Benefit calculation steps: 1. Use AWW with fringes to calculate benefits due (benefit amount cannot exceed 2/3 of the SAWW at the time of injury) 2. Use AWW without fringes to calculate the benefits due (cannot exceed current max rate) 3. Compare the benefits above and pay the greater of the two amounts calculated above

  26. Other AWW issues - Bonuses Generally includable if performance based and/or part of the pay package Examples of includable bonuses: Sales or production based incentives Commissions Safe driving bonuses for truckers Annual profit sharing or Christmas bonuses One time bonuses and awards generally not includable

  27. Other AWW issues - Pre-paid vacation time Pre-paid vacation time is includable in AWW calculation to the extent it is used in the 52-week period covered by the wage statement Example: Employee receives 4 weeks pre-paid vacation pay for the year on January 2 EE uses a week in January and a week in February EE injured in April and out on TTD Include 2 of the 4 weeks on the wage statement to cover the zero weeks in January & February Explain in the comments section

  28. Other AWW issues - Change in employment status AWW should reflect weekly earning capacity of the injured employee in the employment in which the employee at the time of the injury was working. Factors such as promotions, demotions, change from part-time to full-time (or vice versa) may affect AWW calculation Use only those wages after the change in status Still fill in all weeks, note calculation method in comment section

  29. Other AWW issues - Payment in lieu of benefits Examples: Employee receives an extra $5.00 per hour to purchase optional benefits, but chooses not to purchase them Employee opts out of health care plan and is paid a monthly amount regardless of hours worked These payments would be included on the wage statement as wages, not on the fringe benefit worksheet as fringes

  30. Other AWW issues - Tipped Employees Earnings for tipped employees, such as servers, bartenders, taxi drivers, etc., include tips. Reported tips must be included on the Wage Statement as earnings. Example a waitress works 40 hours at $3.75 per hour and reports tips of $200.00 for that week. The wage statement should show earnings for the week of $350.00 (40 hours at $3.75=$150, plus $200 of reported tips). Claim administrators should be verifying the inclusion of reported tips when submitting the Wage Statement.

  31. Calculating Average Weekly Wages Questions???

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