One of the most important things we do as workers compensation attorneys is make sure that the injured worker’s “average monthly wage” (AMW) has been set correctly. This is important because all compensation that an injured worker receives in their claim is based on the AMW. There are various methods of calculating the AMW. The presumptive method is by taking the injured worker’s earnings during the 30 days prior to the injury. If the 30 days prior does not accurately reflect what the worker earned during an average month, the Industrial Commission can “expand the wage base” – taking a longer period of time and coming to a monthly average. For example, if a construction worker had fewer hours in the month before his injury due to bad weather, it may be favorable to take an average of the monthly earnings during the prior 12 months.
The problem in calculating the Average Monthly Wage is that the current process is almost entirely in the hands of the insurance carrier, which has an obvious interest in setting the wage at the lowest possible amount. The carrier is supposed to issue a form 108 within 30 days of the injury, which sets the AMW. The ICA then can either adopt this recommended wage or set a different wage, although they rarely vary from what the carrier has recommended.
There are rumors that the Commission’s Claims Division is going to start seeking input from the injured worker prior to determining the wage. This should result in a fairer and more accurate calculation of the worker’s true earnings.
Chad T. Snow is a workers compensation attorney in Phoenix and Tucson, Arizona. He can be reached at (602) 532-0700, (520) 647-9000, or on the firm’s website at Snow, Carpio, and Weekley.