Car Allowances and Other Expenses Included in Average Weekly Wage?

A client called with a question about his average weekly wage (AWW).  He is a travelling salesperson, and receives commission payments for his sales.  In addition, he is given a car allowance, because he uses his own car and gas on the job, and not a company car.  What he wanted to know, was whether this car allowance should be included in figuring his average weekly wage for temporary total disability benefits.

The answer to this question depends largely on how the car allowance is set up with the employer.  The AWW includes any value you receive for your work.  So if the amount you receive is reimbursement for your actual expenses, then likely it would not be part of your AWW.  On the other hand, if the payment seems to give you some financial gain other than just repaying what your expenses are, then you might be able to include the extra portion in your calculation. 

The same holds true for other expense payments you may receive from your employer, such as reimbursements for meals, gas, hotel, or other travel expenses.   If you are being paid back the amount you put out, then that money is not in the plus column for you, so it would not likely be part of your AWW.  Even though you are not getting paid that money while you are off of work recovering, you also are not putting out that money to travel, so you have not lost anything.

Sometimes, though, travel expenses are paid in other ways, like a flat per diem, or percentage payment.  The amount paid is not necessarily tied to your actual expenses, and you may be receiving more than you are really paying out.  In these cases, the travel expenses might be looked at as a financial gain to you.  So the amount that you are paid above and beyond what your actual expenses are, could be considered part of your AWW. 

Other facts about how your travel expenses are set up could also be relevant to answering this question.  For example, if you are paid a flat amount or a percentage of your salary as expenses, and you continue to receive these payments during a vacation period, it is more likely that they are not just reimbursements for your travel costs, and could be part of your AWW.

All of this is important because the higher your AWW, the more you get paid for the time you miss from work and the higher your settlement will be at the end of the case.  It’s about what is fair to you so you are properly compensated.

Each situation is different, and can vary based on the arrangement that you might have with your employer.  And what the payments are labeled as does not necessarily determine how they may be treated for workers’ compensation purposes.  We would be happy to review your specific situation, and discuss this or any other questions with you.

 

We are workers' compensation attorneys that help people with Illinois work injuries anywhere in IL via our statewide network of attorneys. Contact us and we will answer your questions or find the right lawyer for your situation.

1/7/12

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