Overtime and MN Workers' Comp. Wage Loss

For folks who work overtime on a regular basis, missing out on that overtime pay due to a work injury can be a significant hardship. In Minnesota, overtime pay may be taken into account when calculating an injured workers’ average weekly wage. 

In Minnesota, the amount of an injured worker’s wage loss benefits is based on that worker’s average weekly wage (AWW) at the time of the injury. If that injured worker worked overtime, and that overtime pay was “regular and frequent throughout the year,” it should be included in the average weekly wage calculations.

Obviously, what “regular” and “frequent” mean is somewhat subject to interpretation. For example, if you worked ½ an hour of overtime once in the 6 months before your injury, it probably shouldn’t be included in calculating your average weekly wage. If, on the other hand, you worked a minimum of  hours 10 overtime every week in the 6 months before your injury, that overtime pay should probably be included.

In those cases where overtime isn’t quite so regular, there can be disputes as to whether or not it should be included. 

So why is this a big deal?

For folks that worked a substantial amount of overtime prior to their injury, it can mean the difference of hundreds or even thousands of dollars. 

For example, if an individual was paid $15.00 per hour and worked 40 hours per week, every week for six months prior to his or her injury, his or her average weekly wage would be $600.00, entitling him or her to temporary total disability (TTD) benefits of $400.00 ($600.00 (x) 2/3) per week, if that individual is off work as a result of a work injury.

If that same individual worked 10 hours of overtime per week, every week, at time-and-a half ($22.50), his or her average weekly wage would be $825.00 ($600.00 + $225.00), entitling him or her to temporary total disability (TTD) benefits of $550.00 ($825.00 (x) 2/3), if that individual is off work as a result of a work injury. That’s an extra $150.00 per week. If that worker is off work for an extended period of time due to a work injury, that extra $150.00 per week makes a huge difference!

The issue of overtime also comes into play when an injured worker who used to regularly work overtime hours cannot work overtime following a work injury due to his or her work restrictions.

Using the same example as above, if the injured worker cannot work overtime due to his or her work injury, he or she is missing out on $225.00 per week in overtime pay, meaning that he or she is probably eligible for temporary partial disability (TPD) benefits.

Since that worker is earning less money as a result of his or her work injury, the workers’ compensation insurer is required to pay 2/3 of the difference between his or her average weekly wage (AWW), and his or her reduced earnings. In this case, that injured worker would be eligible for temporary partial disability (TPD) benefits of $150.00 per week. Over an extended period of time, that can add up to a lot of money!

Unfortunately, insurance companies frequently overlook overtime pay in calculating an injured workers’ average weekly wage (AWW). 

Again looking at the example above, if the workers’ compensation insurance company failed to include that workers’ overtime pay in calculating his or her average weekly wage (AWW), he or she would be missing out on an additional $150.00 per week on temporary total disability (TTD) benefits if he or she was completely off work, or an additional $150.00 per week in temporary partial disability (TPD) benefits if he or she was no longer able to work overtime following his or her work injury.

Underpayments of wage loss benefits based on an incorrect average weekly wage (AWW) calculation is one of the most common errors or disputes we see in our Minnesota workers’ compensation practice.

In fact, we regularly sit down with injured workers who are currently receiving workers’ compensation benefits, only to discover that the workers’ compensation insurance company has underpaid them hundreds or thousands of dollars. For a free, no-obligation Minnesota workers’ compensation case evaluation, call Meuser & Associate at 877-746-5680 or click here to send us an email.