Workers' compensation law calls for best salary
Published 02/02/99

When an employee is disabled due to a work-related injury, he will normally be entitled to receive weekly payments from his employer's workers'compensation insurance company. The amount of those payments is determined by taking a percentage (60% in most cases of temporary total disability) of the employee's "average weekly wage." The manner in which the average weekly wage is calculated can therefore have a significant impact on the amount of the weekly workers' compensation benefit payment.

The New Hampshire Workers Compensation statute sets forth a number of methods by which an employee's average weekly wage can be calculated, and requires employers to choose the method which is most beneficial to the employee. Furthermore, in appropriate circumstances, the statute allows the Department of Labor to calculate an employee's average weekly wage on the basis of the rate of pay called for in that employee's employment agreement, or by looking at the earnings of other people in the same company or even the same locality who are doing the same kind of work which had been performed by the injured employee.

In most cases, the statute requires the employer to determine the employee's average weekly wage on the basis of the employee's earnings during either the preceding 52 weeks or the preceding 26 weeks, whichever results in a higher average weekly wage. While for some employees the results of these two calculations will be virtually identical, for other employees there can be a significant difference between the two methods. Consider, for example, an employee who normally earns $10.00 per hour, but receives a large year-end bonus each year. If the employee is injured in October, and his employer uses only the preceding 26 weeks to calculate the employee's average weekly wage, that average will not account for the large annual bonus, but will instead be based solely on the $10.00 per hour earnings. By contrast, if the employer uses the preceding 52 weeks to determine the employee's average weekly wage, the year-end bonus will be accounted for, resulting in a substantially higher average weekly wage. As a result, the amount of the employee's weekly workers' compensation payment should be substantially higher using the 52 week schedule.

The statute also allows the Department of Labor to use alternate methods of calculating an employee's average weekly wage "in order to avoid an inequitable result." This can be particularly helpful to employees of small, start-up businesses. Employees of such businesses will sometimes agree to receive only a portion of their agreed upon salary in order to allow the business to have enough money to operate, with the understanding that they will be paid back when the business becomes more successful. Consider, for example, a computer programmer who is employed by a small, start-up software corporation. The programmer might agree to receive only $400 per week in salary, instead of the $600 per week set forth in his employment agreement. If the programmer suffers a work-related injury and obtains workers' compensation benefits, it might be inequitable to calculate his average weekly wage on the basis of $400 per week. Instead, it may be more appropriate to utilize the $600 per week which was set forth in the employment agreement. The workers' compensation statute does not require the Department of Labor to calculate the employee's average weekly wage in this manner, but it gives the Department the discretion to do so in order to avoid an inequitable result.

The attorney who wrote this article is no longer at the law firm of Hamblett & Kerrigan, P.A. in Nashua. Other practitioners at the firm handle work in the same areas of law which he worked in, which included employment law, family law, and general litigation, including property tax abatement and personal injury.You can reach one of those lawyers by calling the law firm (883-5501) or by e-mail at info@nashualaw.com .

This information is general information and may not reflect the most current legal developments, verdicts or settlements. The information provided should not be relied upon as an indication of the actual state of the law or of future developments. The information contained on the Hamblett & Kerrigan website is for informational purposes only and does not constitute legal advice. If the information referenced may be of legal importance to you, you should consult with an attorney to provide you with legal guidance and opinion as the the effect of the current law upon your situation.