Workers' Comp Payments: Average Weekly Wage

wage replacementThe wage replacement is a payment to the worker while he or she is out of work because of disability. The amount of this payment in North Carolina is equal to two-thirds of the worker’s average weekly wage. There are certain exceptions.

For instance, prison guards employed by the State of North Carolina are entitled to 100% wage replacement if they are disabled as a result of an on-the-job injury. If the worker is out of work for less than seven calendar days, there is no wage replacement benefit. North Carolina wage replacement only begins after the seventh calendar day that the worker is out of work because of the on-the-job injury. After a worker is out of work for 21 days or longer, the employer has to go back and pay the employee for the first seven days. If the worker is not out of work for a full three weeks, the employee never has to pay for the first week that the worker is unable to work.

Average Weekly Wage 

Most workers’ compensation benefits, other than medical benefits, are based upon the injured worker’s average weekly wage. It is therefore extremely important for the injured employee to be sure that the average weekly wage is computed in such a manner as to result in the highest possible wage. Gross earnings (not net earnings) are used to determine the average weekly wage.  North Carolina law defines “average weekly wages” as:

“the earnings of the injured employee in the employment in which he was working at the time of the injury during the period of 52 weeks immediately preceding the date of injury… divided by 52.”

The statute also provides that: 

“Wherever allowances of any character made to an employee in lieu of wages are a specified part of the wage contract, they shall be deemed part of his earnings.”

An example of this would occur when housing is provided to the worker.

If during the relevant 52-week period the worker lost more than seven consecutive calendar days one or more times, these days are excluded from the calculation of the average weekly wage. In such case, the earnings for the remainder of such 52 weeks shall be divided by the number of weeks remaining after the time lost has been deducted. For instance, if during the relevant 52-week period there were two occasions in which the worker missed more than seven consecutive days of work for a total of 21 days missed, the wages earned during that 52-week period would be divided by 49 weeks (52 less the 3 weeks the worker was not working).

Learn how do you calculate the average weekly wage for someone who has been employed for less than a year.