Statewide Average Weekly Wage
This calculates the average wages a worker receives in a state's jurisdiction to determine the minimum and maximum amount an injured employee gets as part of worker's compensation benefits.
How Statewide Average Weekly Wage Works
On filing a workers compensation claim, there is a way to assess the compensation amount you're entitled to after a work-related injury. The statewide average weekly wage or SAWW is the basis on which calculations for the appropriate compensation amount are based, dependent on the nature of a claimant's injuries.
The SAWW is the initial step towards the process of compensation and must be calculated properly using the set methodology for every state. Some states, like Florida, base these earnings on the past 13 weeks preceding your injury, and concurrent employment is included as loss of earnings affects both jobs.
In the calculation for SAWW, some states allow you to include primary work and extra job-related expenses like transportation costs or uniforms. Such costs are grouped together before averaging to find the Statewide Average Weekly Wage. An employee involved in an accident will be given a percentage depending on their level of disability.
Example of Statewide Average Weekly Wage
Under state workers' compensation law, your statewide average weekly wage is used to calculate the portion of benefits you're entitled to. In many jurisdictions, your gross wages, which may include bonuses, tips, sick pay, and other incentives, minus payroll deductions, are taken for the 52 weeks that precede your accident.
The calculations to determine an average weekly wage may depend on how wages were earned since incentive pay like bonuses are annually pro-rated and not lumped into the week they're received. A SAWW calculation will not involve fringe benefits such as employer contributions to pensions, 401Ks, life insurance, health, and welfare of the employee or their dependents.
Other average weekly wage calculation exclusions include social security unemployment, disability, or veteran's benefits alongside wage increases after the date you were injured. If, however, there was another injury with the same employer and worker's compensation benefits were paid with the 52 weeks before this recent accident, they'll be included in your SAWW calculation.
Significance of Statewide Average Weekly Wage
Some state laws hold a maximum and minimum compensation amount for injuries sustained while under an employer's duties equal to the SAWW. Through organs of worker protection and benefit determination like the FUCD or Florida Unemployment Compensation Division, such a State will table these parameters on a website so that workers seeking compensation are aware of receiving their due benefits.
In Pennsylvania, for instance, an employee doesn't need to have had earnings with that employer during the preceding 52 weeks. When calculating the SAWW, the relationship between that employee and the employer is more permissible, along with the following factors.
Factors Used to Calculate
- Salaried employees get their annual salary divided by 52 plus any incentives or bonuses paid with the time-of-injury employer.
- For earnings with the current employer at the time of the accident, wages for employees receiving hourly or overtime pay will have the 52 weeks split into four 13-week periods described as quarters.
- To determine the SAWW, the four quarters are divided again by 13, then the three highest are added with the number then divided by 13
Suppose a worker has not been employed with the time-of-injury employer for the three consecutive quarters. In that case, the total wages earned for any completed quarters are divided by 13 and averaged as the SAWW. With employees who haven't worked at least one quarter, their expected hourly rate and overtime work into the calculation.
Types of Statewide Average Weekly Wage
The worker's compensation act creates an environment where workers injured while on the job receive wage loss indemnity benefits equal to at least 2/3rd of their weekly wage. In Pennsylvania, for instance, this act also provides the maximum and minimum adjustments for the benefit rate as provided for by the US Department of Labor and Industry.
Statewide average weekly wage calculations are also necessary for UC or unemployment compensation, and the state bases them on the most recent available three fiscal years data. Instead of using 12 months for a budgetary year calculation, 36 months are used instead of the 3-year SAWW.
Severance pay deductions from unemployment compensation used the maximum weekly benefit rate based on the 3-year SAWW calculations. Concurrent employment requires wages from both jobs to be used in the analysis but separately. Simultaneously, sporadic work takes the employee's actual per hour wages to avoid underpaying injured workers' compensation.
Statewide Average Weekly Wage vs. National Average Weekly Wage
While the SAWW is regulated at the state level, the national average weekly wage is the Department Of Labor or DOL mandate. Similar to the average weekly calculation for statewide worker's compensation programs, the NAWW rate applies to federal workers and their insuring bodies.
The NAWW is set each year and published by the DOL’s Division of Longshore and Harbor Workers' Compensation as required by section 33 USC 906(b)(3). This agency also sets the maximum and minimum compensation rates for claims every fiscal year and maintains a database of NAWW limits since 1973.
Calculations for the NAWW are based on the average weekly wage for three-quarters of a fiscal calendar ending in June of each year. Whether national or statewide, insurance carriers always try to reduce a worker's Average Weekly Wage rate, which equates to cheaper compensation payouts.