Are fringes taken into consideration when calculating an average weekly wage? If so, how are fringes calculated?
What are fringe benefits? Fringe benefits include things that are provided by the employer such as the cost of any insurance, whether it be health, vision, dental, life and disability; employer contributions to a pension plan and vacation and holiday pay. Fringe benefits are only calculated when they are discontinued.
Occasionally an employer will continue to provide these benefits during disability, however there is no obligation to do so.
In the event that fringes are discontinued during disability, then the average weekly wage is increased to compensate for the value of the discontinued fringe benefit. It is important to remember that the date of injury controls when it comes to calculating both the average weekly wage and the value of the discontinued fringe. Therefore if a fringe benefit is discontinued during a period of disability we use the value of that fringe benefit as it existed on the date of injury. This is important to remember as the cost of health insurance increases between 15 and 25 percent per year.
The other important item to remember regarding the calculation of fringe benefits is that the value of the discontinued benefit is added to the average weekly wage only to the extent that it raises the average weekly wage to two thirds of the state average weekly wage.