If you become disabled from your regular job as a consequence of your industrial injury, then you are entitled to be compensated for missing that time from work.
At first, the statute appears fairly straightforward. A disabled worker is entitled to two-thirds of their average weekly wage, capped at 133 percent of the state’s average weekly wage for that person’s date of injury.
It becomes murkier, however, when you’re calculating what the average weekly wage is.
In the easiest circumstance, the injured worker has been working for that employer for more than a year, and their wages haven’t changed. If that is the case, then all you need to do is add up the gross wages paid for the year prior to the injury, divide by 52, and that is the average weekly wage.
It can become more complicated if that person got a raise part of the way through the year. At that point, you add up the total hours and multiply by the higher wage.
If the injured worker is employed as say, a ranch hand, and they are allowed to live in an employer provided house on the ranch and given use of one of the ranch’s vehicles, and a side of beef, and so forth, then as soon as those extra benefits stop, the injured worker is entitled to be paid two-thirds of the value of those things spread out over the 52 weeks prior to injury. Technically, those things are always part of the average weekly wage, and the person is simply receiving temporary partial disability if they’re allowed to continue living on the ranch, using the truck, etc.
Most of the time, the injured worker doesn’t really have control over what is included or excluded from the average weekly wage.
What is included in the average weekly wage, in most instances, is simply a matter of what the employer actually paid to the worker, or otherwise compensated the worker for.
The tricky part is in determining what things must be included.
When the worker is a tipped employee, however, the worker can influence the average weekly wage. Tips are to be included in the gross wage even though the employer is not directly paying those tips to the worker.
The tricky part is reporting the tips to the IRS and paying taxes on them. If they are not reported, then they are not included in the average weekly wage. For some tipped employees, this can mean a dramatic change in their income.
Without saying the obvious (it’s always better not to try to cheat the IRS), this is a good example of why you need to make sure you report your tips.
Over the years, I’ve represented many tipped employees, some with very severe injuries. One young woman attempted to straighten up when she was under a granite counter and suffered a very severe traumatic brain injury such that she was able to get Social Security disability before she was age 30.
Others have slipped in water and sustained significant back injuries which required surgery. If the tips are included (particularly at a higher quality establishment), the wage can be so substantial that if the injured person can’t return to their job at injury, they are entitled to vocational assistance to be retrained into a job that doesn’t require that they stand, lift, and carry.
For purposes of the workers compensation system, it is a good idea to make sure that your tips are reported, and are included in your average weekly wage to both improve your time loss rate as well as your permanent partial disability if you can’t return to all aspects of that job, and finally, to eligibility for vocational assistance.