What is the typical basis for calculating workers' compensation benefits?

The typical basis for calculating workers' compensation benefits is the average weekly salary. This approach considers a worker’s typical earnings over a specified period, providing a more accurate representation of their earning capacity at the time of the injury. By using the average weekly salary, the benefits can be tailored to compensate the employee for lost wages resulting from work-related injuries or illnesses. This method ensures that the compensation reflects the worker's overall income rather than a short-term fluctuation that might occur in their earnings.

Calculating benefits based on an average captures both regular hours and any additional income sources like overtime, which can play an important role in the financial stability of the worker during their recovery period. This methodology is designed to balance the need for providing acceptable financial support while also ensuring fairness in the compensation process.

Options based on specific short time frames, such as the last few weeks of work, do not provide a comprehensive view of the worker's salary and could result in inadequate compensation. Similarly, focusing solely on the hourly wage rate also fails to take into account variations in work hours and additional earnings. Using the average weekly salary helps to mitigate these concerns and provides a more equitable solution for both the employee and the insurer.