How workers' compensation is calculated.

Calculating Workers’ Compensation: What to expect?

In Workers Compensation by Greensboro Attorney

When people go to work, they don’t expect to get injured or sick. But depending on the nature of the job, it can happen. Therefore, knowing your rights as an employee and ensuring your employer offers workers’ compensation benefits is critical to prepare for the worst-case scenario. All employees have the right to file a workers’ compensation claim against their employer if they get hurt or injured while performing their job. 

But how is the workers’ compensation calculated? It is crucial to know as an employee and employer to ensure adequate benefits, depending on the severity of the injury or illness.

Wage Replacement as Part of Workers’ Compensation in North Carolina

The primary purpose of workers’ compensation in North Carolina is to provide wage replacement for injured or sick employees. It is crucial to get wage replacement whether they have a family to support or are living alone. Since the employee cannot work due to illness or injury, they need the wage replacement from the employer to support their financial needs. This financial compensation is significant since the bills and expenses continue despite being unable to work.

The injured or sick employee qualifies for wage replacement as part of the workers’ compensation insurance if the doctor has stated they would be unable to work. Therefore, the medical report is an important document to support the case and ensure you can get compensated and that your wages are paid, even if you cannot work.

filing for workers' compensation

Calculating Workers’ Compensation

If the employer has obtained this insurance coverage, getting wage replacement or other compensation is a must. But how much and for how long can the employee receive compensation?

The basic formula to calculate workers’ compensation is based on the average earnings of an employee before they get sick or injured at work. It is known as the Average Weekly Wage (AWW). There are four formulas to calculate the employee’s AWW.

  1. If the employee has worked for a year or more with an employer, their annual earnings are divided by 52 weeks. 
  1. If the employee has worked for less than a year, their total earnings are divided by the number of weeks they have worked. 
  1. If the employee has worked for less than three months, the earnings are based on a similar employee level with the same rate of pay. 
  1. An employee must identify their work comp classification code, a four-digit number unique to their industry. Each code matches the rating for a specific industry based on the relative risk for their type of work. 

The workers’ compensation is based on the pre-tax wages of the employee. Therefore, other earnings aside from salary, such as bonuses and stipends, are included in calculating the workers’ compensation benefit. 

The next concern is the duration for the wage replacement benefits. How long will you receive the wage replacement benefits after injury or getting sick? 

According to the Workers’ Compensation Law, the employee can receive this benefit for a maximum of 500 weeks (also known as Temporary Total Disability). The compensation is only awarded with authorization from the attending physician stating the employee cannot work. 

If the injury or illness is not severe enough to stop the employee returning to work, but their ability to work or earn is limited due to the injury or illness, is referred to as Temporary Partial Disability. This will equal two-thirds of the employee’s earnings before suffering from the injury or illness. 

Workers’ compensation benefits.

Why Do You Need a Workers Compensation Lawyer in NC?

Many employees are unaware of the steps involved in filing for workers’ compensation. Most workers have this false assumption that they’re entering an antagonistic relationship with their employer. However, it is your right to get compensation if you are hurt on the job. A workers’ compensation lawyer can provide legal representation to ensure you get your medical treatment and appropriate compensation. Many workers who chose to handle their case independently did not receive the compensation or benefits they deserved due to a lack of expertise in handling such cases. 

Your lawyer can inform you of the steps following an injury or medical concerns. You must have supporting documents and evidence to have a successful claim and get the compensation you deserve. You must file the claim within 30 days and have legal support during the process. Time is critical when filing for a workers’ compensation insurance claim, and it is with a lawyer’s expertise that you can avoid any issues that would delay the successful claim.