Massachusetts Department of Industrial Accidents Issues Ruling on Proper Amount for Employee’s Average Weekly Wage

One of the realities of workers’ compensation claims is that the insurer is required to issue payments for the injured employee’s average weekly wage. Sometimes this is an easy calculation when an employee has worked for the same company for a number of years, and good records are kept of the tax forms issued to the employee. Other times, when an employee is issued paychecks on an intermittent basis or when an employee works for only a short time, it can be difficult to establish the average weekly wage. At least, it opens up the possibility of disputes between insurers and employees on what that amount should be. In a recent workers’ compensation case, the DIA, the administrative body responsible for Massachusetts workers’ compensation disputes, analyzed the appropriate average weekly wage for a workers’ compensation claimant.

The employee worked as a carpenter and was injured at work while moving a large piece of machinery. There was never any dispute that the employee was covered under his employer’s workers’ compensation policy. The primary issue under consideration was the employee’s average weekly wage.

The insurer began paying the employee weekly benefits based on an estimated average weekly wage of $800. The employee, however, contested these payments, arguing that the estimated average weekly wage was approximately $1,500. In support of this figure, the employee submitted 35 weeks of paychecks and a 2011 IRS Form 1099, issued by his employer. The conference order granted the employee an average weekly wage of $1,490.33. The judge’s hearing decision raised that figure to $1,726.37, even though the employee did not appeal the conference order. The insurer appealed, arguing that the ALJ could not raise the employee’s average weekly wage on its motion.

Although there was a wide disparity between the employer’s calculations and the employee’s, the DIA noted discrepancies in the evidence presented by the employee. For instance, the Form 1099 submitted showed an average weekly wage of $1,505.08, rather than $1,490.33. In addition, the relevant 52-week pay period was May 2, 2011 through the date of injury (May 2, 2012). The Form 1099 included payments made during the calendar year and therefore was missing 17 weeks between January 1, 2012 and the date of injury.

The DIA vacated the ALJ’s finding, in accordance with the insurer’s wishes, that the injured party should receive compensation based on an average weekly wage of $1,726.37, and it ordered the insurer to pay the employee benefits based on the $1,490.33 average weekly wage determined at the conference.