Do overtime and holiday bonuses matter in my claim?
Yes, in a Kentucky worker’s compensation claim overtime and bonuses paid before the injury occurred matter because they can increase the money you receive. Kentucky law requires both overtime and bonuses to be used in computing your average weekly wage (AWW). KRS 342.020. Your AWW is used to determine how much money you get when you are off work recovering from an injury, and also how much money you get if you have a permanent disability.
It is fairly complicated how the AWW is computed, but it is important to remember overtime and bonuses usually increase how much money you get. For instance, you get credit for overtime worked, but not for the extra money you get paid for working overtime, which is called the overtime premium. This means if you were regularly paid $10 an hour, and for overtime you were paid $15 an hour, for workers’ compensation purposes the overtime is only counted at $10 an hour. The extra money you get per hour for working overtime is not counted in your AWW, but the base wage is counted.
Also, bonuses are usually averaged over the entire work year. So if you got a $520 bonus in December, that would be divided by 52 weeks and only $10 gets added into your AWW.
There are a lot of other technical rules about computing AWW, and it is tedious and complicated to do the calculations. Because it can be tedious, I see a lot of claims adjusters who do not perform the correct calculations. Generally, they will just multiply the hourly rate by 40 to get an AWW. So, if you work overtime or get bonuses, you could be paid too little for your claim.