Average Weekly Wage Should Reflect “Economic Reality” of Pre-Injury Job

Since there is no payment for pain and suffering available in PA workers’ compensation cases, the amount an injured worker receives for wage loss benefits is critical. These wage loss benefits are set by the “Average Weekly Wage” (AWW), which is calculated based on formulas found in the Pennsylvania Workers’ Compensation Act (Act).

There is no minimum time an employee must be employed to qualify for workers’ comp benefits in PA, and we have seen unlucky folks injured on their very first day of work. When an injured worker has been with his or her employer for less than 13 weeks (less than a calendar quarter), and the wages of the person are not fixed by the week, there are special rules for determining the AWW. Typically, according to the Act, this would be “the hourly wage rate multiplied by the number of hours the employe was expected to work per week under the terms of employment.” But what if this formula did not fit?

Recently, the Commonwealth Court of Pennsylvania faced such an issue in the matter of Anderson v. Workers’ Compensation Appeal Board (F.O. Transport and Uninsured Employer Guaranty Fund). Here, the injured worker was a truck driver, paid by the load, not by the hour. The employer testified before the Workers’ Compensation Judge (WCJ) that the injured worker would earn $1100 to $1200 per week. The first week, the driver had no runs to make. It was on the third run of the following week that he was injured (a bimalleolar fracture to his ankle). The wages earned appear to have been $270.00 for each of the three loads.

Concluding that an hourly calculation, as set forth in the Act, would not work here, the WCJ found the AWW to be $405.00. This figure was found by taking three runs at $270.00 each ($810.00) and dividing by two (since he worked two weeks). The testimony of the employer was found not credible, so the $1100 to $1200 figure was not used. This aspect of the decision was affirmed by the Workers’ Compensation Appeal Board (WCAB).

The Commonwealth Court of Pennsylvania, however, reversed. Given the expected earnings, the Court found that an AWW of $405.00 did not “accurately reflect the economic reality of his pre-injury ability to generate further earnings.” Instead, the Court noted that since work was not available to the injured worker that first week, he should not have that week included in the calculation of the AWW. Thus, the Court found the proper AWW to be $810.00.

There are many aspects of the PA workers’ compensation system which are unfair to the injured worker, and the calculation of benefits is certainly among them (there is no accounting for progressive wage increases, and changes in salary are not accurately reflected, just to name a couple). Having said that, however, we applaud the Commonwealth Court of Pennsylvania for concluding “Such method (as used by the WCJ) would be unfair and would not advance the humanitarian purpose of the Act.”