How Workers' Compensation Benefits Consider Overtime Pay
Many people need every penny of their weekly wages to stay financially afloat. In fact, in today’s economy, many people rely on a full paycheck plus overtime pay each week.
In an acknowledgment that overtime pay is often a necessity, not a bonus, Illinois includes overtime in workers’ compensation benefits. The calculation of wages to be paid to a disabled worker – as in someone who misses at least a week’s worth of work due to a job-related injury – is based on their average weekly wage. This definition does not limit them to only what they are guaranteed to earn through an expected salary.
If you worked an average of 5 hours of overtime each week for the last year, then your workers’ compensation benefits need to include those five extra hours each week when calculated. However, overtime pay is not calculated at the standard 1.5x rate when factored into workers’ compensation payments. Instead, each overtime hour is set to the same rate of all other hours you worked on average in the last 52 weeks.
For example: You earn $18 an hour and work 45 hours a week for the last 52 weeks. Your paychecks are predictably $855 when you get time-and-a-half for those five overtime hours each week. After you get hurt at work and file for workers’ compensation, your average weekly wage would be calculated at $810, the result of $18 multiplied by 45 hours, effectively ignoring the overtime rate increase. (The weekly workers’ compensation amount would be about $540, though, since disability pay is usually 66-2/3% of your average wages.)
Necessity of Overtime Plays a Factor
Illinois case law has convoluted the question of overtime pay in workers’ compensation benefits, though. Throughout the years, claimants have been challenged by employers and insurers alike who argue that workers’ comp is not meant to factor in overtime, only regular pay. The outcomes of these cases have varied.
If it can be argued that you voluntarily worked overtime, then it is possible that your overtime hours will not be factored into your workers’ compensation benefits package. Overtime is more likely to be factored into your workers’ comp benefits if you can show that your employer essentially required or greatly encouraged you to work overtime.
For example: Your employer always assigns you more tasks than can be completed within your 40-hour workweek. You have used overtime for months to complete your tasks, and your employer has never told you to stop using the company’s overtime allowance. If you need disability pay as part of a workers’ comp claim later, then your workers’ compensation attorney could reasonably argue that you were required or encouraged to use overtime to the point that it should be factored as part of your average weekly wages.
There is no need to fight with a workers’ comp insurance company on your own about overtime pay. Team up with Leonard Law Group in Chicago instead. Our attorneys are standing by. Call (312) 487-2513 today.