How to Calculate Your Average Weekly Wage (AWW) for Workers' Compensation in Maryland
In Maryland, your Average Weekly Wage (AWW) is typically calculated by averaging your gross income over the 14 weeks immediately preceding your workplace injury. This crucial figure determines the amount of your compensation checks.
If you have been injured on the job in Maryland, understanding how your wage loss benefits are calculated is critical. Whether you are working in Baltimore, Frederick, or Bethesda, your Average Weekly Wage (AWW) forms the foundation of your workers' compensation claim. The AWW dictates exactly how much money you will receive for Temporary Total Disability, Permanent Partial Disability, and other wage replacement benefits. If the insurance company calculates this number incorrectly, you could lose thousands of dollars over the life of your claim. We recommend reaching out to a skilled local lawyer from our US Lawyers Directory to ensure your wages are accurately reported.
The Strict 14-Week Lookback Period
Under Md. Code Ann., Lab. & Empl. § 9-602, the standard method for calculating your Average Weekly Wage involves looking at your gross earnings (before taxes) for the 14 weeks immediately prior to the date of your accident. You add up all the gross wages earned during this period and divide by 14. It is important to note that the week the injury actually occurred is usually excluded because it is often a short, partial week of pay. Your employer is required to submit this information to the Workers' Compensation Commission, Baltimore using an official wage statement, typically filed after you submit Form C-1, Maryland, Workers' Compensation Commission, Employee Claim Form.
Calculating AWW for Tipped Restaurant Workers
For restaurant servers, bartenders, and hospitality workers across Maryland, a large portion of income comes from tips. The law specifically states that tips must be included in your AWW calculation. However, these tips must have been properly reported to your employer for tax purposes. If you earn cash tips but do not report them on your pay stubs, the insurance company will likely refuse to include them, resulting in a much lower weekly benefit rate.
Factoring in Seasonal Overtime for Construction
Construction workers often have fluctuating schedules, working heavy overtime during the summer in Ocean City or facing weather-related layoffs in the winter. If the standard 14-week lookback period falls during a slow season, it might not accurately reflect your true earning capacity. In the landmark case Gross v. Sessinghause & Ostergaard, Inc., 331 Md. 37 (MD Supreme Court 1993), the court affirmed that the Commission has the discretion to use a different period if the standard 14 weeks leads to an unfair result. An attorney can argue that your AWW should be calculated using a longer timeframe to account for seasonal overtime and capture your true average income.
How Bonuses Impact Comp Rates
Whether a bonus is included in your Average Weekly Wage depends on the nature of the bonus. Generally, guaranteed or performance-based bonuses that are a regular part of your compensation (like a quarterly sales bonus) can be factored into your AWW. However, one-time discretionary gifts, such as a random holiday bonus, are typically excluded from the calculation. Your lawyer can review your pay stubs to ensure all eligible compensation is counted.
Combining Incomes from Second Jobs
Many Marylanders work a primary job and a part-time side hustle to make ends meet. Unfortunately, Maryland law generally does not allow you to combine wages from two different employers to calculate your AWW, even if the injury prevents you from working both jobs. The AWW is almost always based solely on the wages earned at the specific job where the injury occurred, unless you are concurrently employed by the exact same employer in different roles.
Contesting an Incorrect Wage Calculation
If the insurance company files a wage statement that you believe is too low, you do not have to accept it. You have the right to challenge their calculation at a hearing before the Workers' Compensation Commission, Beltsville or another regional office. It is your responsibility to provide evidence, such as W-2s, pay stubs, and tax returns, to prove your true earnings. A miscalculation of even fifty dollars a week can severely impact your long-term benefits, especially if you qualify for an ongoing disability award.
Frequently Asked Questions (FAQ)
What is the maximum Average Weekly Wage in Maryland?
The Maryland Workers' Compensation Commission sets a maximum weekly compensation rate each year based on the State Average Weekly Wage. Your benefits cannot exceed this cap, regardless of how high your actual earnings were.
Are taxes taken out of my workers' compensation checks?
No. Workers' compensation wage loss benefits are generally tax-free under both state and federal law. You receive a percentage of your gross AWW, and you do not pay income tax on that amount.
What if I was only on the job for two weeks before getting hurt?
If you worked for less than 14 weeks, the Commission will typically look at the actual wages you earned during your short time there and project what your average would have been, or they may look at the wages of a similar employee in the same role.
Can the insurance company include the cost of my health insurance in my AWW?
Generally, no. Employer-paid fringe benefits like health insurance premiums or retirement contributions are typically not included in the calculation of your Average Weekly Wage.
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