TIPS ARE INCLUDABLE IN THE AVERAGE MONTHLY WAGE

TIPS ARE INCLUDABLE IN THE 

AVERAGE MONTHLY WAGE

By Attorney Dennis Kurth

Snow, Carpio & Weekley

Today it might be hard to believe that tips should not be included in the average monthly wages of injured waiters, waitresses and bartenders but that was not always the case.  In fact, for the first sixty-five (65) years of the Arizona workers’ compensation statute and jurisprudence, tips were not included in setting the average monthly wage of injured service-workers.

The statue, A.R.S. §23-1041(D) then, referred to the “monthly wage” as the average wage paid…” in the month before the injury.  That language had been considered clear and unambiguous in referring only to the wages, hourly or otherwise, actually paid by the employer to the worker. Tips had been considered excludable because they are gratuities paid by customers directly to the workers.

Seeking to reconcile conflicting opinions from the Arizona Court of Appeals and to set the law straight, the Arizona Supreme Court, in Senor T’s Restaurant (1982)  addressed the issue head on.
The claimant, a waitress/bartender, was paid $425.80 a month in hourly wages and claimed, without any documentation whatsoever, that she averaged $100 a week in tips.  Apparently, the restaurant had a tip reporting policy of which she claimed to be unaware.

The Industrial Commission’s ALJ accepted the claimant’s testimony and added $400 in tips to her average monthly wage.  The restaurant appealed arguing that the statute was clear and tips were not included in the average monthly wage. The carrier also claimed it would be unfair for them to pay benefits on wages not subject to premium charges.

In workers’ compensation jurisprudence nationally, the mood was decisively in favor of including tips in the average monthly wage.  The overwhelming majority of jurisdictions had so decided and Arthur Larson, the respected national authority, was also in favor.

The Supreme Court, in Senor T’s, was more than accommodating.  Seizing upon the claim that the statue was ambiguous, the Court embarked on a quest of statutory interpretation. Ambiguous statutes, said the Court, must be construed in view of the purposes they are intended to accomplish and the evils they were designed to remedy.

The purpose of the law, of course, was to realistically compensate injured workers fairly so that they would not become charges on the public welfare.  To do so, compensation should be paid based upon the workers’ actual earnings. Everyone knew and expected that restaurant employers often paid service workers less than the minimum wage because they assumed that the workers would also receive tips from customers.  The purposes of the law would be undermined by excluding tips from the average monthly wage calculation. Further justifying their opinion, the Supreme Court raised the specter of a constitutional impediment (equal protection) to excluding tips.

Finally, the Court had to parry the restaurant’s argument that only tips which were reported to the employer (and the IRS) should be included.  Acknowledging that it might seem inequitable, the Court still purposefully declined to impose such a tip-reporting requirement and the Commission’s addition of $400 in tips to the claimant’s average monthly wage based on her testimony alone, stood.

The better practice for service employees, of course, is for them to keep an actual record of actual tips earned and indeed, some do, even if only on a calendar for example.  That makes the proof a lot easier.  So does the courageous support of a comparably-experienced co-worker. The statute itself, although re-lettered (A.R.S. §23-1041(G)) has never been changed but the law on tips in the average monthly wage has long since been considered finally settled.

For more information on Workers' Compensation or Social Security Disability, please contact Snow, Carpio & Weekley toll-free at 855-325-4781 or visit our website at www.workinjuryaz.com. We serve the entire State of Arizona and have offices located in Phoenix, Tucson, Yuma and Lake Havasu City.

Average Monthly Wage - Get it Right!

Average Monthly Wage – Get it Right!

By Attorney Erica Gonzalez-Melendez

Snow Carpio & Weekley

One of the most important aspects of your case is average monthly wage. All of your compensation while your case is open and active depends upon your average monthly wage.  At the close of your case, if you get a permanent impairment, the amount of compensation you are paid for the impairment depends upon your average monthly wage.

Your average monthly wage is the amount of money you earned in the 30 days prior to your injury. The goal of setting the average monthly wage is to get a picture of the amount you were earning at the time of your injury.  If you have more than one job, the earnings from the second job would count as well.*  Sometimes, the amount you earned in the 30 days prior to your injury isn’t an accurate reflection of your earnings on your date of injury.  There are lots of reasons that this may happen: maybe you worked less hours or had an unusually high amount of earnings in the days prior to your injury; you could’ve started the job two weeks prior to your injury and therefore there are not 30 days to count prior to the injury.  If it’s the case that you had an unusually high or low amount of earnings in the month prior to the injury, then the Industrial Commission will look at an “expanded wage base”, meaning, looking at earnings over a year or six months, whichever is more appropriate.  If you very recently started your job, they may look at the earnings of other employees at your company who have a similar job to yours.  If you recently had a change in your pay rate, the commission will look at your pay from the day of your raise forward.

As you can see, the average monthly wage is a crucial part of your case and it’s important to get it right.  If you have questions about how your wage was set, you should consult with a worker’s compensation attorney.  Both sides have 90 days to protest a Notice of Average Monthly wage set by the Commission so it’s important to consult with an attorney early in your case regarding this issue.
*The earnings from the second job would count if the second employer is covered by the Worker’s Compensation Act.


For more information on Workers' Compensation or Social Security Disability, please contact Snow, Carpio & Weekley toll-free at 855-325-4781 or visit our website at www.workinjuryaz.com. We serve the entire State of Arizona and have offices located in Phoenix, Tucson, Yuma and Lake Havasu City.

Average Monthly Wage

Average Monthly Wage

By Dennis Kurth, Attorney

Snow, Carpio & Weekley

The “average monthly wage” (AMW) is a critically important concept in workers’ compensation law as it is the basis for calculating all compensation due to the injured worker for the subject injury for the rest of his/her life.  It is officially set by the Industrial Commission shortly after time loss begins to accrue and when the carrier issues a preliminary AMW figure which the Commission reviews.  It carries a ninety (90) day statute of limitations for protest by claimants.

The presumptive AMW, under the statute and case law, is whatever the claimant earned in gross wages in the thirty days before the injury.  The exception is when that figure does not accurately reflect the claimant’s earning capacity.

In such cases the Commission may use an “expanded wage base “ and look at a greater period of wages pre-injury.  In cases where the claimant did not work a full month before the injury, the Commission might request from the employer and carrier, the wages of two other similar employees to use as a basis for setting the claimant’s AMW.  It might also just extrapolate an AMW based on the hourly rate and number of hours per week the claimant was hired to work.

AMW setting can often be problematic when the claimant received a raise shortly before the injury, or enjoyed a particularly lucrative month of enhanced earnings not destined to be repeated or went from being a low paid entry-level trainee to a full-time responsible employee in the month before the injury.  In such cases, use of an expanded wage base or extrapolation might be called for.

AMW settings should be closely scrutinized for accuracy by claimants and their representatives as soon as the carrier issues their notice setting the preliminary AMW.  Carriers, often with the misguided encouragement of the Industrial Commission, sometimes use an expanded wage base in situations where it is not called for to the great detriment of the claimant.

In the initial meeting with the claimant, the attorney should look for the status of the AMW setting and review the thirty-day wage reported by the carrier to the Commission.  If necessary, the claimant should be asked to provide pay stubs for the sixty (60) days or so before the injury.  If the claimant does not have such information in the initial meeting, a quick phone call to ICA claims can produce the needed information promptly. 

Setting the AMW is one of the few instances where the Commission actually issues an award which either side can protest.  Presumably many claimants, trust the Commission, a state agency, to look out for them and set the AMW fairly so that they are compensated fairly based on what they would have earned had the injury not occurred.  Unfortunately, that is not always the case, and claimants are best advised to be pro-active on their own behalf and seek an opinion by an experienced workers’ compensation attorney.

If you or someone you know has been injured at work or suffers from a medical condition or injury that will keep them from working for 12 months or longer, contact Snow, Carpio & Weekley at 855-325-4781 for a free consultation statewide. You may also learn more about us by visiting our website at www.workinjuryaz.com.

Concurrent Employment

Concurrent Employment

Arizona law provides that an injured worker is entitled to receive temporary compensation benefits if his doctor notes that his injury is preventing him for working, or limiting the type of work he can do.  

An injured worker is entitled to receive 66 2/3% of his average monthly wage.  This can include wages earned from another job, if the injury prevents one from doing both jobs.  It is very important that the insurance carrier is notified that you had concurrent employment.  Once you provide documentation on wages earned from this second job the insurance carrier should take this into account when they submit their recommendation of the average monthly wage.  If the wages from the second job are not included, you should notify the industrial commission and submit your documentation to prove that there are additional wages.  

Once the Industrial Commission issues their Notice of Average Monthly Wage you only have 90 days to protest the amount listed on that notice.  If that still doesn’t include wages earned from another job, you must request a hearing on the matter so that it may go before an Administrative Law Judge.  After the 90^th day, the wage has been set and will with very few exceptions, be the wage set for the remainder of the claim.

Blog WC Tip of the Day By:

Diana Robles, Attorney

Snow Carpio & Weekley

Tucson, AZ Office

If you or someone you know has been hurt on the job or has an disability that could prevent them from working for at least one year, contact Snow, Carpio & Weekley for a free consultation by calling toll-free at 855-325-4781.

Determination of Your Average Monthly Wage

Determination of Your Average Monthly Wage

Under the Workers Compensation system in Arizona you are entitled to two things while your claim is open; Medical treatment and 66 2/3% of your average monthly wage, if a doctor is keeping you off work or placing restrictions on what work you can do.  

Your average monthly wage is typically based on the 30 days prior to the date of injury.  However, in some instances this is not a fair or true assessment of what your wage should be.  For example, if you do not receive paid vacation time and had just taken a vacation within the 30 days prior to the injury, it wouldn’t be fair to use that to determine what your average monthly wage is.  Things like bonuses, overtime pay, and a side job should all be accounted for in the determination of one’s average monthly wage.  

When you get an Average Monthly Wage determination notice from the Industrial Commission of Arizona you have 90 days to protest it if you do not agree with the wage. 

You should contact Snow,Carpio & Weekley, so one of our attorneys can review this, so that your wages are determined in a way that is fair and accurate and not just left to the insurance company’s adjuster.

Blog WC Tip of the Day By:

Diana Robles, Attorney

Snow Carpio & Weekley

Tucson, AZ Office

If you or someone you know has been hurt on the job or has an disability that could prevent them from working for at least one year, contact Snow, Carpio & Weekley for a free consultation by calling toll-free at 855-325-4781.

Average Monthly Wage

In every single Worker's Compensation case the insurance carrier must recommend what the average monthly wage of the injured worker will be. It is very important that the average monthly wage is calculated accurately to reflect the earnings of the injured worker. If the wage is not calculated correctly the injured worker and for his attorney must protest the notice within the allotted time. One of the first things I do when a client has retained me, I look to see if the average monthly wage has been established. If it has not been established I immediately asked my client to gather all his paycheck stubs and W-2 forms so that we can accurately recommend the most appropriate wage that will benefit my client. In Arizona, if the injured worker has dual employment, wages from each employer must be taken into consideration when calculating the average monthly wage. It is important to calculate the average wage correctly because the injured worker will be compensated based on the average  monthly wage and as an attorney representing injured workers I always want to maximize the wage because All future in indemnity payments will be based on the average monthly wage.

X. Alex Carpio

Notices of Average Monthly Wage

One of the most important things we do as workers compensation attorneys is make sure that the injured worker's "average monthly wage" (AMW) has been set correctly.  This is important because all compensation that an injured worker receives in their claim is based on the AMW. There are various methods of calculating the AMW.  The presumptive method is by taking the injured worker's earnings during the 30 days prior to the injury.  If the 30 days prior does not accurately reflect what the worker earned during an average month, the Industrial Commission can "expand the wage base" - taking a longer period of time and coming to a monthly average.  For example, if a construction worker had fewer hours in the month before his injury due to bad weather, it may be favorable to take an average of the monthly earnings during the prior 12 months. 

The problem in calculating the Average Monthly Wage is that the current process is almost entirely in the hands of the insurance carrier, which has an obvious interest in setting the wage at the lowest possible amount.  The carrier is supposed to issue a form 108 within 30 days of the injury, which sets the AMW.   The ICA then can either adopt this recommended wage or set a different wage, although they rarely vary from what the carrier has recommended. 

There are rumors that the Commission's Claims Division is going to start seeking input from the injured worker prior to determining the wage.  This should result in a fairer and more accurate calculation of the worker's true earnings. 

Chad T. Snow is a workers compensation attorney in Phoenix and Tucson, Arizona.  He can be reached at (602) 532-0700, (520) 647-9000, or on the firm's website at Snow, Carpio, and Weekley. 

Maximum Average Monthly Wage for 2012

The Industrial Commission of Arizona has calculated the maximum average monthly wage for work injuries occurring in calendar year 2013 at $4,185.78.  This is a 74% increase in the maximum wage since 2007.  In 2006 a group of attorneys who represent injured workers in Arizona lobbied at the state legislature for an increase in the maximum wage, which had been stuck at $2,400 for several years and was among the lowest in the country.  The wage has been increased to $3,000 in 2008, $3,600 in 2009, with indexed increases every year since.  This is a boon for higher wage workers with permanently disabling injuries, who previously were only compensated a small fraction of their lost earning capacity.

Snow, Carpio, and Weekley

Workers' Comp. Tip of the Day

To anyone bringing in significant income from tips, commissions, or bonuses,

KEEP GOOD RECORDS

in the event that you are one day injured and have to pursue a workers' comp case!

You see, many times servers and bartenders and other workers who bring in significant income from tips end up experiencing improper wage calculations and mis-calculations of benefits owed when in pursuit of workers' comp cases. The same is true for workers who work off commissions or receive large bonuses.

This is another reason why it pays to have a workers' comp attorney helping you with your case – we see these situations often and can help you maximize your benefits. The insuracne carriers would love to pay your benefits at a lower rate but why not get what you are truly entitled to?

Chad T. Snow is a workers compensation attorney in Phoenix and Tucson, Arizona. He can be reached at his offices at (602) 532-0700, (520) 647-9000 or at Snow, Carpio, and Weekley.



In the absence of Chad Snow, blog posted by: April Lang-Snow, Business Manager @ Snow and Carpio, PLC

Can Wages from Self-Employment be Included in Work Comp Payments?

I recently had a potential client where the injured worker worked for very short, intense periods with the Employer, during one of such periods he injured his right shoulder.  During the times he wasn't working for the Employer, he would work for himself. The carrier set the wage based only on the wages earned during the prior year with the Employer.  The injured worker wanted to include his wages earned during periods of self employment. 

Unfortunately, the law in Arizona is well settled that only concurrent wages from "covered" employment can be included in the calculation of the average monthly wage.  This means that the other employment must be covered under the workers compensation Act to be eligible for inclusion in the average monthly wage.  Since the injured worker didn't carry workers compensation insurance on himself in the self employed job, it would not be considered covered, and was not able to be included in the calculation of his average monthly wage for purposes of workers compensation benefits.  It is unfortunate for him because his industrial injury precludes him from doing even his self employed work now and he will not be compensated for the wages lost from that work as a result of his industrial injury. 

The rationale behind this policy is to encourage all workers to carry, or work for employers who carry, workers compensation insurance. 

Chad T. Snow is an attorney practicing workers compensation law in Tucson and Phoenix Arizona.  He can be reached at Snow, Carpio, and Weekley or at (602) 532-0700, or (520) 647-9000. 

New Average Monthly Wage for 2010 Arizona Work Injuries

The Industrial Commission of Arizona has come out with the new statutory maximum average monthly wage for all injuries occurring in 2012.  The new maximum wage will be $4,062.29.  This is the highest monthly earnings that can be considered in calculating any kind of compensation in an Arizona Workers comp case.  Temporary compensation is paid at 66 2/3 percent of the average monthly wage and permanent partial at 55% of the difference between the AMW and whatever the injured worker is able to earn thereafter. 

As recently as 2007, the max wage was only $2,400.00, meaning that the most an injured worker could receive in compensation per month was $1,600.00.  This severely penalized higher wage workers who were injured on the job.  The Arizona Association of Lawyers of Injured Workers, of whom Alex Carpio and I are members, fought hard at the legislature to get raises in the maximum wage, to $3,000 in 2008, $3,600 in 2009, and indexed for inflation every year thereafter.  This allows higher wage workers to receive more fair compensation for time lost from work for injuries sustained on the job in Arizona. 

Chad T. Snow is a workers compensation attorney who represents injured workers before the Industrial Commission and Social Security Administration.  He can be reached at Snow, Carpio, and Weekley, or through his Phoenix office at (602) 532-0700 or in Tucson at (520) 647-9000.