While an injured worker is out of work under the care of an authorized workers’ compensation physician they are entitled to be paid 70% of average weekly wages if they miss work for more than seven days. There is always a lot of concern and disagreement over the calculation of the average weekly wage. Most workers’ compensation attorneys rely on a calculation where the 26 weeks of wages prior to the accident are averaged and multiplied by 70% to calculate the weekly temporary disability rate. A careful reading of the statute below shows that the 26 week average rate only applied to employees performing piece work, a type of work that is not very common nowadays, not to the average hourly employee.
The statue governing the calculation of wages and rate for worker's compensation in New Jersey is N.J.S.A. 34:15-37. This section of the statute states in part the following:
"Wages," when used in this chapter shall be construed to mean the money rate at which the service rendered is recompensed under the contract of hiring in force at the time of the accident. Where prior to the accident, the rate of wages is fixed by the output of the employee, the daily wages shall be calculated by dividing the number of days the worker was actually employed into the total amount the employee earned during the preceding six months, or so much thereof as shall refer to employment by the same employer. When the rate of wages is fixed by the hour, the daily wage shall be found by multiplying the hourly rate by the customary number of working days constituting an ordinary week in the character of the work involved; providing however, if the employee worked less than the customary number of working days constituting an ordinary week in the character of the work involved, the weekly wage for the purposes of compensation under provisions of R.S. 34:15-12a only shall be found by multiplying the hourly rate by the number of hours of work regularly performed by that employee in the character of the work involved.
Therefore it is clear that for hourly employees, the correct way to calculate wage and rate is to determine the customary work week, and the normal rate of pay and multiply to calculate a weekly wage. The above section of the statute seems fairly clear, however there are always important issues that come up in calculating the wage and rate in workers’ compensation cases. The wage and rate effect temporary and permanency weekly payments, For any questions regarding the New Jersey workers’ compensation statute please contact Stark and Stark.