Workers' compensation benefits in North Carolina are calculated by determining the worker's average weekly wage, which is two-thirds of their pre-tax earnings during the year before their work injury. (Visit the prior link to view exceptions.) The calculation generally incorporates the employee's wages for the 52 weeks prior to the date of injury. Watch the video above to learn about proper wage calculations.
Individuals often ask our workers' comp attorneys in Raleigh how bonuses, vacation time, and overtime factor into their wage calculations. Bonuses that occurred within 52 weeks prior to a worker's injury are generally included as part of the calculation, for injured workers who qualify. Workers receiving TTD (temporary total disability) do not factor vacation time into their workers' comp payment amounts, but they can incorporate bonuses and overtime. How does overtime play a role? Let's take a look:
Overtime payments that occurred within 52 weeks prior to the worker's injury will be used in valuating the average weekly wage. In 2016, the overtime regulations in the Fair Labor Standards Act were updated. The changes go into effect on December 1, 2016 and raise the threshold for overtime eligibility and add protection to salaried workers. The FLSA requires that nonexempt workers receive overtime pay (1.5 times the regular pay rate) for any hours worked past 40 hours in a workweek. The forthcoming changes in December will affect the overtime payments of many workers in North Carolina. For work injuries that occur after the new requirements go into effect, the overtime payments that occur during the year before the injury will be used in calculating the average weekly wage (as described above).
Important Note: North Carolina imposes a cap on weekly workers' comp benefits. Even if a worker's earnings result in a higher payment, the maximum payout per week as of this writing is $944.00 (for the 2016 calendar year).
Workers should not simply accept whatever workers' comp benefit payment their employer sends them, it could be wrong. Take time to learn how the state's laws apply to your unique work situation. There is no substitute for a consultation with a lawyer, and our initial consults are free of charge. If your benefits are wrong, we can help you start the process for receiving retroactively corrected payments.