Workers’ compensation is a vital protection for employees who suffer injuries or illnesses on the job. But have you ever wondered, “how is workers’ compensation pay calculated“? Understanding the calculation process can help you ensure that you receive the appropriate compensation for your work-related injury or illness.

What Are the Factors that Influence Workers’ Compensation Pay?

How is Workers Compensation pay calculated

There are several factors that can influence how your workers’ compensation pay is calculated. Understanding these factors can help you have a better idea of what to expect in terms of compensation for a work-related injury or illness.

1. Average Weekly Wage

Your average weekly wage is a key factor in determining your workers’ compensation pay. This is usually calculated by looking at your earnings over a specific period of time, such as the 52 weeks leading up to your injury. The higher your average weekly wage, the higher your compensation benefits are likely to be.

2. Degree of Disability

The extent of your disability is another important factor in determining your workers’ compensation pay. Disability can be classified as temporary or permanent, and partial or total. If your injury or illness leaves you unable to work at all, you may be entitled to receive a higher compensation rate compared to someone with a partial disability.

3. State Laws

Workers’ compensation laws can vary from state to state, and each state has its own guidelines for calculating compensation benefits. These laws outline the maximum and minimum compensation rates, as well as any specific rules or regulations that may affect your pay.

4. Medical Expenses

Your workers’ compensation pay may also cover medical expenses related to your injury or illness. This can include doctor’s visits, hospital stays, surgeries, medications, and rehabilitation costs. The amount and duration of medical benefits can vary depending on the severity of your condition and the recommended treatment.

5. Vocational Rehabilitation

In some cases, workers’ compensation may include vocational rehabilitation services to help you return to work or find suitable employment if you are unable to continue in your previous job. These services can include job training, job placement assistance, and vocational counseling.

How Is Your Workers’ Compensation Pay Calculated?

Your weekly checks – if you’re totally out of work – are called temporary total disability checks (TTD). If you think about it this makes sense… it isn’t permanent, but you are completely out of work. These TTD checks are two-thirds of your average weekly wage (AWW), and subject to maximum amounts for any given year.

Your AWW is the average of what you earned over the last 52 weeks with that employer taking into account overtime, bonuses, absences of less than a week, raises, etc. It’s extremely common for an insurance company to set your AWW at your base pay and ignore any overtime, per diems, etc. But it’s critical to get this figure right. It’s the key to your entire claim. With that in mind, it may not be wise to trust the adjuster to correctly determine the amount.

What Are the Common Mistakes in Calculating Workers’ Compensation Pay?

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Calculating workers’ compensation pay can be a complex process, and there are several common mistakes that can occur. It’s important to be aware of these mistakes to ensure accurate and fair compensation for injured workers.

One common mistake is miscalculating the average weekly wage (AWW). The AWW is used as a basis for determining the compensation amount, and it is calculated by taking the worker’s earnings over a specific period of time and dividing it by the number of weeks in that period. However, errors can occur when calculating the AWW, such as excluding overtime pay or not considering all sources of income. These mistakes can result in a lower compensation amount than what the worker is entitled to.

Another mistake is failing to consider the correct disability rating. The disability rating is a percentage that represents the extent of the worker’s impairment or loss of function. This rating is used to calculate the compensation amount. However, if the rating is not accurately determined or if the wrong rating is used, it can lead to an incorrect compensation amount.

Additionally, not considering all eligible benefits can be a mistake in calculating workers’ compensation pay. There are various types of benefits that injured workers may be entitled to, such as medical expenses, rehabilitation costs, and vocational training. Failing to include these benefits in the calculation can result in an incomplete and inaccurate compensation amount.

Lastly, failing to keep up with changes in workers’ compensation laws and regulations can lead to mistakes in calculating pay. These laws and regulations can vary by jurisdiction and may be updated periodically. It’s important to stay informed and ensure that the correct guidelines and formulas are being used to calculate compensation.

To avoid these common mistakes, it is recommended to seek the guidance of a workers’ compensation attorney or a knowledgeable professional who can assist in accurately calculating workers’ compensation pay. By doing so, both employers and employees can ensure that the compensation amount is fair and in compliance with the law.

Oxner + Permar Law is here to help. We are experienced in North Carolina Workers’ Compensation Law and can provide you with the guidance you need to ensure that you receive the full compensation that you deserve. Contact us today for more information.