Do you work in the service industry? Are your wages supplemented by tips on a regular basis? Do you depend on them as part of your overall income? If so, you need to consider how tips factor into a workers’ compensation claim.
The amount of your temporary total disability benefits (TTD) is the money an individual is paid when they are hurt and not able to work according to their authorized treating medical professional. The TTD is determined by the worker’s average weekly wage (AWW). The AWW refers to the wages paid to the worker by their employer during the 4 weeks prior to the incident or injury, on average.
When an employee depends on tips or gratuities as a supplement to their wage, the AWW may not be an accurate reflection of income. The hourly wage may be low, but when tips are added to the equation, the overall pay may increase significantly. This makes it very important to be aware of when tips and gratuities can be considered in the total wage amount for calculation of total disability benefits.
Factors that Can Affect The Inclusion of Tips and Gratuities in Average Wage Calculations:
- Have the tips been reported for tax or insurance purposes? If an employee fails to report their tips on their taxes, they usually won’t be included in workers’ compensation calculations. The court may still allow tips to be included, but typically only in cases where the employee was told not to report their tips by their employer.
- Were tips discussed at hiring or included in the hiring contract as a part of the employee’s pay? If so, tips will be included in the wage calculation.
- What is your wage or salary prior to tips? The court will also consider the employee’s wage when determining whether or not tips should be included in average wage calculation. If the employee’s wage speaks for itself and tips are obviously a supplementary to the standard pay, they will not be included.
If you have questions about how your average weekly wage is calculated, you need to know what amount you should receive for your temporary total disability benefits, or you need to talk about whether tips will be considered in the calculation of your workers’ compensation claim, the experienced workers’ compensation attorneys at Stanley-Wallace Law are prepared to help you. Please get in touch as soon as possible so we can help you protect your rights.