Calculating Wage - Basic Summary
Basic Two-Part Comparison
The TTD rate for a full-time employee is computed at 66.67% of the higher of the:
- Hourly rate at the time of injury, including a shift differential if in effect when injured, multiplied by the number of regularly scheduled hours of work
- Taxable gross earnings, excluding tips, paid by the insured in the 52-weeks prior to the week of the injury, divided by the number of weeks worked (or in a pay status, as in paid vacation and sick leave) in that same period.
- For tipped employees, see "Additions to Cash Wage" section below.
- Weeks and earnings while on short or long term disability, TTD from a previous claim, or salary continued from a previous claim should not be included for Part 2.
- Gross earnings of less than six weeks are reported but not used to establish the average weekly wage (AWW).
- Any part of a calendar week worked counts as a week.
- If the employee has changed status from full-time to part-time, and if the new schedule has been in effect for at least 90 days, use only the gross earnings and weeks dating from the schedule change.
- TTD and PPD rates can be no higher than the maximum rate in effect for the year of the injury.
Explanation of Regularly Scheduled Weekly Hours:
The regularly scheduled weekly hours of work are the number of hours scheduled per week as established by the employer for the class of employment. If the schedule of weekly hours varies or deviates by more than 5 hours for any week within the 13 week period prior to the injury, the regularly scheduled weekly hours must be set at a full-time schedule for that occupation. A full-time schedule is presumed to be 40 hours per week unless the employer or employee can establish that it is otherwise.
Not including overtime when it is part of the regular schedule; not including shift differential; not including all taxable earnings, such as incentive pay, bonuses and overtime in gross earnings; incorrectly counting “weeks worked/paid”; using weeks and wages after the date of the injury; and using wages earned from an employer other than the insured. A serious error is not documenting wages. The WKC-13A should report only confirmed, not estimated, wages.
There are numerous “exceptional employment” situations that may not follow the Two-Part Comparison. See: Determine Wages for
Employees in Exceptional Work Schedules or Receiving Exceptional Types of Compensation.
An employee is considered part-time if they are regularly scheduled or actually work 35 hours or less per week. To calculate the TTD rate of part-time employees, it would need to be determined if the employee 1) is part of class and 2) self-restricts to part time on the labor market. Once these two factors are determined, the same Two-Part Comparison listed above can be used to calculate wage.
Determing if an Employee is Part of Class
The employee is considered part of class of all of the following are true:
- There is at least one other part-time employee at the location of injury doing the same job with the same schedule.
- The employee works a regular schedule (hours worked per week in the 13 weeks prior to injury do not vary more than 5)
- The class of part-time employees represents a minimum of 10% of all employees at the place of injury doing the same type of work.
If the employee is a part of class, the hours entered in Part 1 of the Two Part Comparison would be their regularly scheduled hours or expanded to the minimum of 24 hours.
If the employee is NOT a part of class, the hours entered in Part 1 of the Two Part Comparison would be expanded to full-time, 40 hours.
Self-Restriction to Part Time on the Labor Market
Applying the self-restriction option to a claim limits the AWW and TTD rate for part-time employees. If the self-restriction option is applied to a claim, the wage would be based on the employee's actual earnings (hours worked per week would not be expanded). It also requires payment of TTD at 100% of the AWW rather that 66.67%.
The self-restriction option can be applied if:
- The employee confirms that they restrict to part time on the labor market
- The employee does not have a second job or is self-employed at the time of injury
- The restricted TTD is not greater than the non-restricted TTD
To apply the self-restriction option, have the employee fill out the self-restriction form (WKC-12698-E) that may be downloaded from our web site.
Notes on Self Restriction:
- The WKC-13A can be sent in prior to the form being received, but will be in Investigation status until the form is received.
- The statement must be signed and dated by the employee after the injury (no pre-agreements).
- If under age 16 when injured, the statement is not needed but the WKC-13A must indicate that the employee restricts.
- The PPD rate is calculated without the restriction statement.
Additions To Cash Wage
Meals and Lodging: The standard value for “meals” and “room” is set in Wis. Admin. Code DWD 80.29 and 272. The value of all other items is set by common marketplace value to the employee. Meals received at a discount are not used as additions to cash wage. See ERD-9247-P (Spanish ERD-9247-S-P) for Wisconsin Maximum Allowances for Board and Lodging.
Tips: Be sure the employer reports total tips separate from total gross. Then divide the total tips by the weeks worked for the tips to get the weekly tip average. The average tips per week then will be divided by actual hours worked to get the tip rate. The tip rate is added to the hourly rate when calculating wage and must equal no less than minimum wage. The weekly tip average is added to the gross earnings average. See ERD-9247-P (Spanish ERD-9247-S-P) for complete Minimum Wage Rates chart.
House or Apartment: Employer to determine value. Be sure to check if the housing is shared, e.g., shared with one other person, use half the value if the employer gives you the total value.
Need to know if any of the above (except tips) is continued during the disability. Those items continued by the employer through the disability period, and for which reimbursement is not expected, need not be added to the TTD wage for the period received. However, they are included in the PPD and death benefit rates. If discontinued during the disability period, the value must be refigured into the TTD rate (contact DWD).
This brief summary was prepared for discussion only. Always refer to state statutes and administrative codes as they apply to specific situations.