I.  THE STATUTE - Back to Table of Contents

The method of calculating an employee’s average weekly wage (AWW) is prescribed by Section 10 of the Workers’ Compensation Act.  The basic features of Section 10 are as follows:

• AWW is based on earnings during the 52 weeks preceding the injury.

• If employee lost five or more calendar days during the preceding 52 weeks, those missed days are excluded from average weekly wage calculation.

• Where employee worked less than 52 weeks prior to injury, average weekly wage is calculated based on actual earnings during period of employment.

• In most cases, overtime and bonus pay is excluded from AWW calculation.

• Earnings of a similarly situated employee may be used to calculate AWW if it is “impractical” to compute the injured workers’ earnings.

• Earnings made from a second job are included in the AWW if respondent employer had knowledge of second job prior to the injury.

In most cases, the computation of an employee’s AWW can be done by simply following the directives of Section 10.  Others, however, do not lend themselves to a straightforward analysis.  In those cases, the Industrial Commission and courts have established guidelines for calculating a worker’s AWW.  Some examples are discussed below.

A.  Partial Workweeks - Back to Table of Contents

Peoria Roofing and Sheet Metal Co. v. Industrial Comm., 181 Ill. App. 3d 616, 537 N.E.2d 381, 130 Ill. Dec. 314 (3d Dist. 1989) - In this case, the petitioner had worked for the respondent for nine years prior to the work accident.  During the 52 weeks preceding the accident, the petitioner, who was considered a full-time employee, only worked a total of 134 days during 43 calendar weeks.  Petitioner’s total earnings during the 43 weeks of work was $17,859.50.

The petitioner argued that his average weekly wage should be computed by dividing the number of days worked (134) into his total earnings of $17,859.50 which would work out to daily earnings of $133.28.  Those earnings would then be multiplied by five (representing the total number of days in a work week), for an average weekly wage of $666.40.

The respondent took the position that the number of weeks worked (43) should simply be divided into total earnings of $17,859.50, creating an AWW of $413.34.

The Industrial Commission and appellate court agreed with the petitioner.  In arriving at its holding, the appellate court noted:

The respondent’s interpretation of the emphasized Section 10 language strains the plain meaning of the phrase ‘and all parts thereof’ it effectively equates all calendar weeks during which the petitioner did any work regardless of how many days he worked during the week.  Whereas one day is, in fact, only a fraction of a work week, the respondent would seek to have one isolated day in a calendar week regarded as a ‘week’, not as a fractional ‘part thereof’.

Under the respondent’s analysis, any employee who ‘lost five or more calendar days’ but nonetheless worked in every calendar week, would have his average weekly wage calculated based on a 52-week year, just as under the initial provision of Section 10.  Peoria Roofing and Sheet Metal Co. v. Industrial Comm., 181 Ill. App. 3d 616, 537 N.E.2d 381, 130 Ill. Dec. 314 (1989)

Thus, under the analysis in the Peoria Roofing case, only the actual days worked are taken into account in determining an employee’s average weekly wage.

Cook v. Industrial Comm., 231 Ill. App. 3d 729, 596 N.E.2d 746, 173 Ill. Dec. 122 (3d Dist. 1992) - In Cook, the petitioner worked 24 weeks during the year before the accident.  He worked three full 40 hour weeks and during the remaining weeks, worked many partial days and partial weeks.  At arbitration, the arbitrator divided the petitioner’s total earnings ($10,266.41) by 24 to make an AWW of $427.77.  The petitioner objected to the AWW used by the arbitrator and argued that only actual work days should be used in the AWW formula.

On appeal, the method of AWW calculation was affirmed by the appellate court.  In reaching its decision, the appellate court acknowledged that its holding was contrary to the opinion in Peoria Roofing and Sheet Metal.  However, the court in the Cook case focused on the fact that there was little, if any, evidence in the record to support the petitioner’s proposed method of calculation and emphasized that the petitioner would receive an unfair windfall under his proposed method of calculation.

B.  Seasonal Employees - Back to Table of Contents

Illinois-Iowa Blacktop, Inc. v. Industrial Comm., 180 Ill. App. 3d 885, 536 N.E.2d 1008, 129 Ill. Dec. 958 (3d Dist. 1989) - This case involved a petitioner who worked for the respondent on a seasonal basis, typically from April through December of each year.  Petitioner worked exclusively for the respondent for 15 years.  He collected unemployment during the off months.  During the 52 weeks before the accident, the petitioner worked 20 weeks.  At arbitration, the average weekly wage was computed by dividing the number of weeks actually worked (20) into the petitioner’s non-overtime earnings.  This was affirmed by the appellate court even though it was noted that it gave a slight windfall to the petitioner.

C.  Overtime - Back to Table of Contents

Edward Hines Lumber Co. v. Industrial Comm., 215 Ill. App. 3d 659, 575 N.E.2d 1234, 159 Ill. Dec. 174 (1st Dist. 1990) - The petitioner was required by his employer to work more than 40 hours per week, if necessary.  He averaged 67 hours a week during the year before the accident.  The appellate court affirmed the Industrial Commission’s decision to calculate the AWW by multiplying the number of hours regularly worked by the petitioner’s straight time, hourly rate.  In so holding, the court placed much significance on the fact that the petitioner’s customary work week exceeded 40 hours.  The court interpreted the reference to “overtime” in Section 10 as referring to:  “(1) compensation for any hours beyond those the claimant regularly works each week, and (2) extra hourly pay above the claimant’s normal hourly wage.”  575 N.E.2d at 1238.

D.  Fringe Benefits - Back to Table of Contents

Ogle v. Industrial Comm., 284 Ill. App. 3d 1093, 673 N.E.2d 706, 220 Ill. Dec. 562 (1st Dist. 1996) - The petitioner claimed the value of his fringe benefits, such as pension contributions, should be included in his AWW.  This argument was rejected by the appellate court.  In doing so, it was noted that the fringe benefits were paid directly to the petitioner’s union rather than the petitioner.  The court further observed that Section 10 refers to “salary, wages, or earnings” and does not mention fringe benefits.

This case is also noteworthy because it holds that mandatory overtime hours should have been included in the AWW calculation.

E.  Free Meals and Vacation Pay - Back to Table of Contents

Levkovitz v. Industrial Comm., 256 Ill. App. 3d 1075, 628 N.E.2d 824, 195 Ill. Dec. 360 (1st Dist. 1993) - Petitioner was a manager at a restaurant.  He ate free meals at the restaurant on the days he worked.  The petitioner argued that the value of the meals should be included in his AWW.  This was rejected by the appellate court, which found that the meals resembled a “bonus” and should be excluded from the AWW figure.  The court further held that vacation pay may be included as part of the employee’s AWW.