A Quick Primer on North Carolina Worker’s Compensation Rate Calculation

In a nutshell, when you have a compensable North Carolina Workers’ Compensation Claim you are entitled to three things:

1) Payment for your time out of work,

2) Payment of your medical treatment, and

3) To the extent that there is any, payment for any permanent disability you will suffer as a result of the injury.

Admittedly, this is a bit simplified; there are other benefits available in NC Workers’ Compensation law, but for the most part, you can boil it all down to these three things.

There are lots of intricacies involved in the interpretation of what the workers’ compensation insurance carrier has to pay for medical treatment (you can look forward to future posts on that), and I have another blog post already that deals briefly with some permanent disability injury values in comp claims and the spooky way we value body parts.  Plenty to discuss there, but this post is more about the first thing: payment for your time out of work.  So how does that work (oh, look…a pun!)?

So your doctor writes you out of work, and as a result you aren’t getting a paycheck.  If you are out of work for just one week (7 days) then you aren’t entitled to anything for your time out of work.  But once you’re out for more than seven days, then the clock starts ticking (parenthetically, if you are out for more than 21 days, then you will get paid for that first week you didn’t get paid for at first, so that’s nice).  Under NC Comp Law, you are entitled then to 66 2/3% (.6667) of your average weekly wage (AWW), payable on a weekly basis, until you get back to work (there can be some limitations on that, but that’s for another post).  This benefit is called Temporary Total Disability, or TTD, in our system.  The amount they pay you (the 2/3 of your average weekly wage is called your Compensation Rate (or CR).

I am sure that explanation gives you more questions than answers, such as: Where in the heck do they get that number?  And what is my average weekly wage?

The 2/3 of your paycheck number comes from the legislative supposition that most people pay around 1/3 of their paycheck into taxes, so most people only take home about 2/3 of their pay.  Since your TTD check is not taxable, that seems to be fair on its face.  We won’t explore the fact that most people don’t end up paying 1/3 of their pay to taxes, but at least there is some plausible rationale.

But what is your average weekly wage?  That’s sort of simple, and sort of not, just like the rest of the law; if it were simple, who would need lawyers?.  In the best situations, this is calculated by looking at what you made with that employer over the last 365 days. There are at least four accepted methods of calculating your average weekly wage, listed below in order of preference according to the North Carolina Statutes and the Industrial Commission:

1)      If you worked 52 weeks before the accident with that employer, take that total earnings and divide them by 52; or

2)      If you missed more than 7 days during the 52 week period prior to the injury, then the number of days missed will be deducted from the 365 day period, and gross wages will be divided by the remaining days to determine a daily rate; the daily rate is then multiplied by seven to obtain the AWW; or

3)      If you worked for this employer less than 52 weeks, you can still do the daily method above, unless considering other options it appears unjust, in which case you might try;

4)      Look at an employee at the same employer with similar work hours responsibilities, etc.., and determining their AWW in the most just and similar manner possible.

How could it be simpler than that?  I’m just kidding.  It can sound like gobbledy gook to me, too, but I’m around it, so I get it.  What makes it even more interesting is that you can take into consideration other forms of compensation as well.  Overtime is an obvious one, since you would hopefully get those numbers in your gross wages anyway.  But if you receive other benefits – like subsistence allowances, room and board stipends, extra duty bonuses, etc. – that can be factored in as well.  And while one of these four will normally do the trick, our legislature has opened the door for other options as well if one of these doesn’t seem to be just.  This means that if the numbers just come out crazy for some reason, the Industrial Commission will at least listen to other arguments for AWW and Comp Rate calculations.  Once you have your AWW, then you multiply that by .6667 and you have your Comp Rate.

Interesting stuff, huh?  North Carolina Workers’ Compensation law is a particular and persnickety (I stole that from the cheese commercial, I know) area of law that is best navigated by professionals with experience.  If you or someone you know has a question about a worker’s compensation claim, feel free to call me anytime.