At the Workers’ Compensation Bench Bar Meeting on December 7, 2011, the Honorable Richard E. Hickey, III (retired) gave an informative presentation on the calculation of temporary disability benefits in workers’ compensation cases.
As a general rule, the rate for workers’ compensation weekly temporary disability benefits are calculated based upon the average weekly wage of the injured worker in the 6 months before the accident. Workers’ compensation attorneys rely on N.J.S.A. 34:15-37 to address the issue of how to compute wages. This section of the Workers’ Compensation Statute that states that we look at the wages of the injured worker in the 6 months before the accident is not a “bright line” rule in practice. This practice of looking back 6 months really applies to a worker who works “piece work.” However, the majority of workers in today’s labor market are not working piece work. Most workers have an hourly rate of pay or a yearly salary. The status says that when the rate of pay is hourly, we multiply the hourly rate by the hours worked in an ordinary week. Sounds simple, but the phrase “ordinary week” leaves a lot of room for interpretation.
This is especially true since the statute also states that if the employee works less than the customary number of days or hours in an ordinary week, then the rate shall be determined by multiplying the hourly rate by the number of hours regularly worked by that employee in the “character of the work involved,” another phrase open to interpretation. The statute does NOT address what happens if a person misses work for sickness or vacation, and does not customarily get paid for this time. In calculating that person’s average wage, is that week omitted from the calculation or counted in as “0″ wages for that week? The statute does not answer that question. While case law states that this section of the statute is a guide for trying to arrive at a realistic estimate of the worker’s true weekly earnings, this does not always happen in practice. Once the average weekly wage is determined, the injured worker receives 70% of that wage, tax free, while they are out of work under the care of the workers’ compensation doctor. The 70% figure is going to be capped in the year 2012 at $810.00 per week.