Average Weekly Wage Calculation
Average weekly wage (AWW) can be a significant factor in determining a carrier’s exposure in a workers’ compensation case in New York because it is the basis for indemnity benefits calculation for the duration of the case. The compensation rate on a case is two-thirds of the AWW, subject to a statutory cap.
There are several methods for calculating AWW in New York. New York Workers’ Compensation Law (WCL) § 14 controls, and there is extensive case law from the New York Workers’ Compensation Board (WCB) addressing the topic. In addition, the WCB has promulgated Form C-240 Employer’s Statement of Wage Earnings for employers to report claimant earnings in the 52 week period preceding the date of injury/illness, which is the basis of the AWW.
WCL § 14(4) provides that the AWW is 1/52nd of the claimant’s average annual earnings. Essentially, AWW is average annual earnings for the 52 week period preceding the accident, divided by 52. The question is how to calculate average annual earnings. Claimants will want to maximize average annual earnings calculations in order to maximize AWW thus, maximizing their rate of compensation.
WCL § 14(1) provides that if the claimant worked at the job where the injury happened during substantially the whole year preceding the injury, the average annual earnings is 300 times the average daily wage for a six-day worker, and 260 times the average daily wage for a five-day worker. AWW is determined by dividing gross earnings in the 52 week period preceding the accident by number of days worked in that period, multiplying by the appropriate multiple, and dividing by 52. There is no provision under WCL § 14 to calculate AWW by dividing gross annual earnings by number of weeks worked.
WCL § 14(2) applies to workers who did not work substantially the whole of the year prior to the date of accident and authorizes the use of the earnings of a similar employee in calculating the AWW.
If WCL §§ 14(1) and (2) cannot be fairly applied, WCL § 14(3) should be used. WCL § 14(3) essentially provides that the average annual earnings shall reasonably represent the annual earning capacity of the claimant in the employment being worked at the time of the accident, provided, however, the average annual earnings shall consist of not less than 200 times the average daily wage or salary that was earned in such employment during the days so employed.
Because the statute provides that the average annual earnings shall consist of not less than 200 times the average daily wage or salary that was earned in such employment during the days so employed, the Board Panel has found that it is appropriate to use the actual number of days worked as a multiple where more than 200 days are worked.
In Espinosa vs. 319 West 48th Street Realty Co., the C-240 included wages for 48 out of the 52 weeks preceding the work accident, and the remaining 4 weeks were not accounted for. As completed, the C-240 reflected that the claimant worked for 198 days in the year preceding the work accident. The Law Judge determined the AWW by straight division using 48 weeks. Although the Board Panel found that the C-240 was improperly completed because 4 of the 52 weeks in the year preceding the accident were not accounted for, the AWW was modified without prejudice using the 200 multiplier, and there was a direction for the employer to submit a properly calculated C-240.
According to the form C-240, “substantial part of the year” does not require any particular number of days worked but as a guideline 234 days at 5 days per week and 270 days at 6 days per week. That is in general, the AWW of a 5 day worker who works 234 days or more in the 52 week period preceding the accident should be computed using the 260 multiple method provided by WCL § 14(1), and a 6 day worker who works 270 days or more should be computed using the 300 multiplier method.
In Gomez vs. 168th Street Development, the C-240 reflected that the claimant was employed at an hourly wage for a five-day week, and that in the 52-week period preceding the accident, he worked 319 days. The C-240 also reflected that for 34 out of the 52 weeks preceding the work accident the claimant worked a seven-day week; for 1 week he worked a six-day week; for 14 weeks he worked a five-day week; for 1 week he worked a four-day week; for 1 week he worked a one-day week and; and for one week he did not work any days. The Law Judge calculated the AWW by dividing the claimant’s total earnings for the year preceding the accident by the number of weeks worked. On appeal, the Board Panel modified the Law Judge’s decision, found that the claimant is a six-day worker, and determined the AWW using the 300 multiplier. The Board Panel noted that in determining whether a claimant has worked substantially the whole of the year the Board has traditionally applied a 234-day guideline for five-day workers and a 270-day guideline for six-day workers (as set forth on the form C-240). The Full Board affirmed.
However, the Board has discretion to find that a claimant is or is not a five-day per week worker, regardless of whether 234 days or more, or 270 days or more, are worked in the 52 week period preceding the accident. The Board has found in certain cases that a claimant who worked less than 234 days is nevertheless entitled to use the 260 multiple to calculate AWW, and in other cases that the 260 multiple is not appropriate.
In Matter of Windsruct, Inc., the Board Panel found that 220 days worked did not constitute substantially the whole of the year. The Appellate Division, Third Department has held that where a claimant worked 205 days out of the year, the claimant did not work substantially the whole of the year.
However, in United Parcel Service, the Board Panel found that the 260 multiplier is appropriate, even where the C-240 reflected approximately 222 days worked, as the claimant worked for substantially the whole of the year immediately before the injury. The C-240 indicated that the claimant worked 3 six-day weeks; 26 five-day weeks; 15 four-day weeks; 4 three-day weeks; and 1 two-day week. The number of days worked was not specified for one week, and the claimant did not work and did not receive wages for two weeks. Although the C-240 reflected only 222 days worked, the Board Panel noted that the C-240 indicates the claimant worked for 50 weeks. As such, it appears the Board Panel will also consider number of weeks worked, in addition to the days worked guidelines, when determining whether a claimant worked substantially the whole year preceding the accident.