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Employees who are injured in the course and scope of their employment are only entitled to weekly wage loss benefits and medical benefits. While these benefits are limited in nature, they provide injured workers with medical treatment that is reasonable, necessary and causally related to their work injuries and monetary awards in the event they are suffering a wage loss. However, emotional distress, pain and suffering and other damages available in tort law are a distant thought in the world of workers’ compensation.

With the formation of workers’ compensation law, employees have essentially forfeited their constitutional right to pursue civil actions against their employers in exchange for the entitlement of weekly compensation checks as the only available form of financial recovery after sustaining work-related injuries.

In order to determine the correct amount of weekly wage loss benefits payable to given individuals, their average weekly wage must be calculated. When an injured worker does not have a fixed income or salary, the Pennsylvania Workers’ Compensation Act focuses on the amount of time the employee actually worked for the employer immediately preceding the work incident and the amount of wages earned during that period of time. Under these circumstances, where varied wages are involved, the act has delineated three different methods for calculating an individual’s average weekly wage.

For long-term employees, the earnings used to calculate the average weekly wage are taken from three of the four highest periods of 13 weeks immediately preceding the date of injury. However, for injured workers who have not been employed for at least three consecutive periods of 13 weeks, the earnings for any completed period of 13 weeks immediately preceding the date of injury are used in calculating the average weekly wage.

Lastly, newly hired employees who have worked less than 13 weeks for their employers leading up to the date of injury are permitted to use their hourly rate multiplied by the number of hours they expected to work to determine their correct average weekly wage. Once this calculation is completed, the worker’s corresponding weekly compensation rate is typically two-thirds of the average weekly wage.

With the various benefits and forms of compensation available to employees these days, it is important to know what is considered “wages” when computing an individual’s average weekly wage. Money advanced or reimbursed to an employee for board and lodging, profit-sharing payments and exercised stock options may constitute wages, as in Lennon v. WCAB (Epps Aviation), 934 A.2d 153 (Pa.Cmwlth. 2007); Carpenter Technology v. WCAB (Santoro), 751 A.2d 710 (Pa.Cmwlth. 2000); and Scott v. WCAB (Crown Cork & Seal/Ace American Insurance), 895 A.2d 68 (Pa.Cmwlth. 2003).

Additionally, bonuses are considered wages for the purpose of computing the average weekly wage and are usually prorated over the entire year, as in Lane Enterprises v. WCAB (Patton), 644 A.2d 726 (Pa. 1994). Moreover, overtime pay must be included as wages, as well as vacation pay, which is attributed to the entire year and prorated accordingly, as in Harper & Collins v. WCAB (Brown), 672 A.2d 1319 (Pa. 1996), and Corning v. WCAB (Bryner), 684 A.2d 244 (Pa.Cmwlth. 1996).

While it is a well-established principle that these calculations are supposed to reflect a realistic measure of what an employee could have expected to earn had he not been injured, this is not always the case. Each year, the state Department of Labor and Industry releases a statewide average weekly wage, which is the maximum amount of benefits an injured worker is entitled to receive after going out of work due to injury. For example, in 2014, the maximum allowable compensation rate is $932 per week. Therefore, if an employee earned more than $1,400 per week prior to sustaining a work-related injury, the maximum amount of money that individual could receive in workers’ compensation benefits would be $932 per week. Clearly, by placing a cap on injured workers’ average weekly wage, it is impossible for higher-wage earners to be provided financial support consistent with what they could have expected to earn had they not been injured.

Another issue arises for long-term employees who have periods of layoffs or are out of work for personal reasons while still under employment prior to sustaining work-related injuries. Despite missing time from work and not receiving any wages whatsoever, employers are allowed to use that period of time against their employees when calculating their average weekly wage, as in Reifsnyder v. WCAB (Dana), 883 A.2d 537 (Pa. 2005).

Unless it can be shown that there was an actual severance of the employment relationship, the act permits employers to use $0 as the worker’s wages during the time he or she is out when averaging earnings and calculating weekly wages, as in Janson v. WCAB (EM Force), 49 A.3d 458 (Pa.Cmwlth. 2012).

This would inevitably lower the average weekly wage and unjustly penalize the worker for missing time from work whether his or her absence could have been prevented or not. Under these circumstances, the average weekly wage becomes diluted, which results in long-term employees being forced to live without the type of compensation they could have expected had they not been injured.

Although the Workers’ Compensation Act provides financial assistance for injured workers who are no longer able to work, the calculation of those benefits is not always an accurate reflection of what they should be entitled to. With workers’ compensation benefits being the sole remedy for injured workers, there must be a greater focus on guaranteeing that injured employees are able to financially survive after sustaining a work injury. 

Samuel H. Pond is the managing partner of the workers’ compensation and Social Security disability law firm Pond Lehocky Stern Giordano.

Andrew F. Ruder is an associate with the firm and concentrates his practice in the area of workers’ compensation litigation.