In this post, we will examine the basic computation of the AWW and discuss several common questions that arise when trying to determine the correct AWW.

Basic Computation of the Average Weekly Wage

Section 10 of the Illinois Workers’ Compensation Act provides the basic rules for computing the Average Weekly Wage, using a two-part formula that looks like this:

The formula looks simple enough, but the challenging part is knowing what wages can be included, and what number of weeks should be used.  The answers depend on several factors we discuss below.

Base Wages Earned

Salaried employee calculations are usually very easy. If you are paid by salary, then your weekly  salary is typically your Average Weekly Wage.

For hourly employees, a simple rule to follow is to determine the wages earned is to start with the date you last worked, as shown on last paycheck you received before you were injured.  From that check, go back for 52 weeks and add up all of your straight time wages. We’ll call this your “regular pay.”  Don’t count any bonuses, overtime wages, or any other payments you received besides straight time wages at this point. You can’t include any other earnings besides your straight time wages unless you are allowed to add them as discussed in the sections below.

Additions to your Wages Earned

Overtime Earnings

Overtime is considered to be any hours worked in excess of your regular work week.  The general rule is that you are not allowed to include wages from overtime in figuring the AWW.  The exception to this rule is that you may include earnings from overtime work only if your overtime hours were mandatory or regularly worked.  You should note that even if you do get to include overtime hours, you only get to count them at the straight time rate (not time and a half or double time).

Mandatory hours are easy to understand.  If you are required to work overtime as a condition of your employment, you get to add the wages for those hours you worked in the year (at your straight time rate) to your regular pay.

Whether non-mandatory overtime is regularly worked is bit harder to understand.  We can’t put an exact number on how many hours over how many weeks will be considered “regularly worked.”  If your regular work week was 40 hours, and you worked overtime in something over half of weeks, then you probably will be able to add the wages for those overtime hours (at your straight time rate) to your regular pay.  Whether you can include overtime in less half of the weeks is a question that needs to be answered on a case by case basis.

If your regular work week consisted of less than 40 hours, you have a more complex situation than can be answered here.  You may be able to include your wages over your normal work as overtime, but it is not possible to say without having additional information.

Bonuses

You are not allowed to include bonuses in your AWW.  However, just because your employer calls something a “bonus” does not necessarily mean it is a bonus for our purposes.  Think of bonuses this way.  If the money you received is like a gift and doesn’t have anything to do with how hard you worked, when you worked, or you taking on some undesirable task, then it is treated like a gift and you can’t include it.   A common example would be a Christmas bonus.  You received this as a gift, regardless of how hard you worked. It cannot be included.

Say you get a “production bonus” because you and your coworkers’ exceeded a quota or met some other goal. It is pay you received for work you performed.  You get to count it in your wages, even though it is called a “bonus.”  Another common example of bonus pay would be hourly shift differential bonuses for working the midnight shift.  You get to count it.   You also get to include all of the regular hourly pay you might get for working on Sunday or Holidays, as well as vacation days paid and sick days paid, as they are a part of compensation for you working, not gifts.

Wages from a Second Job

If you had a second (or additional) job that you worked on the date you were injured, you may be able to include the earnings from your additional jobs in computing your average weekly wage.  This is known as “concurrent” employment.

The rules of concurrent employment are simple.

1.  You had to have the job on the date you were injured.  If you stopped the day before, or planned to start next week, you can not include it.

2.  Your employer must know that you had concurrent employment before you were injured.

3.  The concurrent employment is a typical type of job.  That is, you worked for someone else and they paid you an hourly wage, salary, or sales commission.  If the job you had was a self-employment job, you will not be allowed to include those wages unless you can demonstrate with a high degree of reliability that the job was a real job, and that the pay was made on a standard periodic basis (eg. Weekly). A nebulous claim of lost profits is not going to count.

4.  You can provide paycheck stubs, employers earnings statement, tax withholdings, and/or estimated tax payments to actually document your earnings from the other job.  A undocumented claim of concurrent employment will fail.

If you can meet all of the above 4 criteria, the wages from your concurrent employment can be added to your wages earned.

A word of warning may be in order here.  If your injury does not disable you from your additional job, you may be prevented from recovering any Temporary Total Disability benefits.  You may still be entitled to temporary partial disability benefits, but being able to work in your second job demonstrates that you are not totally disabled.   On the brighter side, however, the addition to the average weekly wage from concurrent employment will hopefully make up for the loss when it comes time to conclude the claim for permanent disability.

Computing the Number of Weeks Worked

If you worked a full 52 week period before your injury, and you didn’t have any serious interruptions in your earnings (missed more than 5 days of uncompensated work during the year) your AWW calculation is pretty simple.  Add up all the wages you are allowed to count and divide by 52.  That will be your average weekly wage.

If you didn’t work a full 52 weeks, but you did work quite a few full work weeks, say 26 or more, that’s okay.  Add up all the wages you are allowed to count then divide by the number of full weeks that you did work.

Regardless of the number of weeks that you worked, if you missed more than 5 days during the past 52 weeks that you didn’t get paid for, or your work week is not a full work week (5 days a week), or you didn’t work at least 26 full work weeks, the computation of the number of weeks worked can get a lot more complicated.  You should consult with a lawyer, as it is impossible to give you any definite guidance without having a lot more information.  Remember, the calculation of the Average Weekly Wage directly affects how much compensation you are entitled to.  If you want to be treated fairly, you need to get it right.

Adjustments to the Average Weekly Wage

Once you have determined your Average Weekly Wage, you will then use it to compute the correct rate for payment of Temporary Total, Temporary Partial, or Permanent Total Disability benefits (66.666% of the AWW) and/or a Permanent Partial Disability rate (60% of the AWW).  Once you have calculated the proper disability rate, you must then compare it to the rates tables published by the Workers’ Compensation Commission for minimum and maximum rates.  Here are the current rate tables as of the date this post is being made.  Note that the date ranges shown are for the date of injury, not the current date.  If the rate you calculated is above the maximum, your rate is capped at the maximum rate shown in the table.  If the rate you calculated for a particular benefit is below the minimum listed you should use the minimum rate for that particular disability benefit, but only so long as your AWW is higher than the minimum rate.  If the AWW is lower than the listed rate, you should use the AWW as your disability rate.

There are some special rules that apply, depending on the type of benefit being computed.  For example, other minimum rates apply when an employee is permanently and totally disabled.  And, where compensation is being paid for a decreased earning capacity claim, the AWW normally has nothing to do with the computation of benefits.

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We hope that this information is helpful in understanding the concept of average weekly wage as it applies to your workers’ compensation claim.  As always, if you have any questions or need assistance with a claim, give us a call.  Hanagan & McGovern PC.  www.hmcomplaw.com  618-241-9251

Delay In Giving Notice Can Be Fatal To A Workers’ Compensation Claim

Section 6(c) of the Illinois Worker’s Compensation Act requires that notice of an accident must be given within 45 days after the accident.  Notice may be given either orally or in writing, and should give the date and place of the accident.  However, even though the law allows 45 days to give notice, a worker should never intentionally delay giving notice.  Delay in giving notice calls into question whether the accident really happened, and can result an employer contesting a claim and the claim being denied.

Reasons for a delay in giving notice of an accident are numerous.  Delay usually happens when an employee thinks the injury is minor and not likely to cause a problem or because the employee is new to a job and doesn’t want to cause a problem.  After a few days or weeks, when it appears that the injury is more serious, the worker then reports the accident only to find that their employer is suspicious and unwilling to pay compensation benefits.  Even a delay of a couple of days can cause some employers to deny compensation benefits if the timing of the delay is suspicious.  For example, when a worker is injured on a Friday, and doesn’t report the accident until the following Monday morning, the employer may think that the employee was injured over the weekend and is now claiming to have been hurt at work.

Regardless of the reason, intentionally delaying giving notice of an accident for even one day can cause problems with a claim.  Workers are well advised to immediately report any accident, or at least report it before leaving work for the day.  Not reporting the accident can cause some serious problems.

What Notice Is Required?

In general, proper notice only requires giving information to the employer to let them know that an accident occurred and when and where it happened.  So long they are provided with sufficient information to alert them about the injury and their need to investigate further, notice should be sufficient. 

Sometimes, an employer will contest a workers’ compensation claim on the basis that the worker failed to fill out an accident report.  There is an important distinction to be made here. The employer may have a policy requiring an employee complete an accident report following an accident.  If so, the employee should follow the company procedure and fill out the report or risk getting in trouble with the employer.  However, the worker’s compensation act only requires that the worker give oral or written notice to the employer, it does not require the employee fill out any reports.  Simply telling the supervisor or other person in authority is all that is required to satisfy the notice requirements for workers’ compensation purposes.

Notice Of Repetitive Trauma Accident Under The Workers’ Compensation Act

With some injuries, like repetitive trauma accidents, there is no specific event that caused the injury.  Therefore, it may appear difficult to say when a worker should have given notice of an accident.  As a general rule, a worker should report a repetitive trauma accident to their employer when they first realize that they are having a physical problem due to the work they have been doing.  This normally will coincide with the worker’s request for medical treatment or when the worker first learns from their doctor that the problems they are having were caused by their work.

If you have a question about giving notice of a work accident under in Illinois, give us a call.

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Hanagan & McGovern is a Mt. Vernon, Illinois, workers’ compensation and personal injury law firm serving southern and central Illinois. If you have questions concerning this article or have other workers compensation questions, please contact us.

Under the law, a injured worker that is unable to return to any type of work, or is only able to return to restricted work at lower earnings, is entitled to compensation for their loss of earning capacity.  Work comp benefits may be due to them for either permanent and total disability or their decreased earning capacity due to the injury.  Retiring, however, seriously jeopardizes and most often destroys the worker’s right to these benefits.  In short, the law may view retirement as voluntarily removing themselves from the labor force, meaning they have no loss of future earnings to be compensated for.  Using retirement benefits, which the worker has already earned based on their many years of service to their employer, as a substitute for workers’ compensation benefits, designed to compensate them for their future loss of earnings, doesn’t make much sense when they are entitled to receive both.

Even when no employer provided retirement benefits are involved, claiming benefits for Social Security Retirement or Disability can still eliminate the workers’ rights to work comp benefits for future loss of earnings.  When an injured worker is put in a position where they are unable to return to their job and they are considering taking retirement or signing up for Social Security, they need to carefully consider their options.  Their family’s future is at stake and errors can be very costly.

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Hanagan & McGovern is a Mt. Vernon, Illinois, workers’ compensation and personal injury law firm serving southern and central Illinois.  If you have questions concerning this article or have other workers compensation questions, please contact us.

We start our analysis by recognizing that just about everyone that has ever been terminated from a job thinks that their termination was “wrongful.”  In their mind, what the employer did was “wrong,” or the reason given by the employer was “wrong,” or the allegations of a co-employee about improper conduct were “wrong.”  People seem to think that if the employer relied on some information that was incorrect or disputed, then their termination must have been “wrongful.”  That is not normally the case.

Illinois, like most other states, follows the doctrine of “at will” employment.  That is, the normal employment relationship between an employer and employee is a consensual relationship at the will of each of them.  If one or the other decides they no longer wish to be in the employment relationship, they each have the right to terminate the employment without repercussion.  With an “at-will” employment relationship, the employer can fire an employee for any reason or no reason at all.  However, there are some exceptions to this general rule which do restrict an employer’s right to terminate an employee.  These restrictions fall into a few broad categories:

1)  Employment Contracts — Not all employment relationships are “at will.”   Some relationships are governed by an employment contract that may have specific contractual requirements that govern how and when an employee can be terminated.  Employment contracts are seen with highly paid or specialized employees as well as union employees, where the employment arrangement is governed by a collective bargaining agreement.  Yet another example might be a situation where the employer provides an employment manual or otherwise adopts rules that govern how and when termination may occur.  In each of these examples, the specific rules governing termination will normally spell out the proper process by which the employer can terminate the employment relationship.  If that process is not followed, the termination may constitute a wrongful termination.

2)  Anti-Discrimination Policies — State and Federal law recognize that a person should not be discriminated against because of their age, race, sex, religion, disability, and national origin.  As a result, any attempt to terminate an employee based on one of these protected statuses may be considered a wrongful termination.

3)  Violation of Public Policy — State and federal law also provide that there are certain types of conduct in which an employee should be allowed to engage without fear of retaliation from their employer.  Some common examples of this might be an employee who is a member of an armed forces reserve unit that needs time off for training, a person that has to be off work for a family emergency under the Family Medical Leave Act, and an employee that “blows the whistle” on an employer’s improper or illegal conduct.  An additional example involves an employee that exercises their right to receive workers’ compensation benefits.  The Illinois Supreme Court has ruled that it is improper for an employer to terminate a worker because they have exercised their right to recover workers’ compensation benefits.  See Kelsay v. Motorola, 74 Ill.2d 172, 384 N.E.2d 353, 23 Ill.Dec. 559 (1978).  In each of these examples, the law recognizes that the employee’s conduct should not be punished and is, therefore, protected.

 The above list of restrictions to the at-will employment doctrine is not meant to be a comprehensive list.  It is meant only to help demonstrate that the term “wrongful,” when used in “wrongful termination” refers to the violation of some legal right, not whether the information the employer used, or the decision making process, was correct or not.  Absent the violation of a legal right, there is little by way of restrictions on the termination of employment.

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Hanagan & McGovern is a Mt. Vernon, Illinois, workers’ compensation and personal injury law firm serving southern and central Illinois.   If you have questions concerning this article or have other workers compensation questions, please contact us.

In 2005, the Illinois state legislature created the Injured Workers Benefit Fund (IWBF) to help compensate workers injured while working for an uninsured employer.   While implementing the fund was a move in a positive direction, and it does accomplish its purpose, proceeding with an IWBF claim is still a complex process that is difficult to maneuver.  For example, in addition to the uninsured employer, a claimant must also name the IWBF in their claim.  The claimant must establish that the employer was uninsured by means of obtaining a certification from the state.  The claimant must actually try the case before an Arbitrator and obtain an award, as settlements are not really possible with these claims.  Finally, the claimant must submit the proper documentation of the award back to the IWBF within 90 days in order to be eligible for payment.   Even when successful on these claims, payment on the claim won’t be made until the following year and may only be a partial payment of the amount due.   All of the “hoops” required to win recover on an IWBF claim pretty well means that the injured worker will need an attorney.  Otherwise, they risk of getting tripped up in the process.  Regardless, the IWBF provides a means for uninsured workers’ to recover at least some of the benefits they deserve and the process seems to work fairly well.  It was a big step in the right direction

We are also happy to note that the state has been cracking down on uninsured employers in Illinois.  The state Attorney General’s office has been actively pursuing recovery of expenses and fines from the uninsured employers with injured workers.  The state has also stepped up the enforcement of the mandatory insurance provisions of the compensation act.  In late 2012, the Workers’ Compensation Commission reported that a Chicago Grand Jury had indicted three employers for the willful violation of the mandatory insurance provisions, a class 4 felony carrying prison terms of one to three years and up to $25,000 in fines.  The Commission also recently reported that it has been issuing citations and fining employers for operating without insurance.  This money is being used to fund the IWBF as well.

Enforcement of the mandatory insurance provisions and the creation of the IWBF have made a significant difference for injured workers in Illinois.  In addition, the process of placing the financial burden back on those that violate the act makes a lot of sense and helps to reduce the costs to taxpayers and those conducting business in a legitimate fashion.  Most importantly,  injured workers are no longer left to shoulder the burden of uninsured employers alone.

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Hanagan & McGovern is a Mt. Vernon, Illinois, workers’ compensation and personal injury law firm serving southern and central Illinois.   If you have questions concerning this article or have other workers compensation questions, please contact us.