California Wage Statement Dreamin'

09 Feb, 2022 Bob Wilson


My company is currently in the process of expanding the calculator section within our service. And we might save the workers' compensation industry in the process. Foremost among the efforts, and most requested by the workers’ comp professionals we serve, is an Average Weekly Wage Calculator. Our Compliance people and Developers have been toiling at that task for some time. The calculator, when finished, will be able to do double duty. It will determine the average weekly wage of an injured worker, as well as auto-complete the wage statement form designated for a particular state (where required). Where no form is designated, a generic report for the file will be generated.

Simple right? Average weekly wage? Why, you just take what a person was paid, divide by the number of weeks they worked, and you have an average weekly wage. Bim bam boom, you’re done, right?

Not exactly. Depending on the state, you might need Regular Weekly Gross Pay, Hourly Rate, Hours Worked, Overtime Rate, Overtime Hours, or Overtime Weekly Wage. And we can’t forget tips, meals, housing, bonuses, commissions, and the often dreaded “other,” which opens up a host of frightening possibilities. We also must be cognizant of the fact that some states require 13 weeks of this data be used for the calculation. Others 26. Of course, we can’t leave out states like California and Illinois, which have deemed that a full 52 weeks of history across some or all these categories must be included when determining the average weekly wage. 

Except in some states, where certain categories like benefits must be reported and included on the wage statement but excluded from the final calculation if it is still being paid by the employer.

Please, try and keep up. I have limited time here. It is a project taking its toll on the developer in charge. We've had to remove all the sharp objects from his workplace. That was no small task. He works from home. We did provide him some decent plastic cutlery. We're not inhuman, you know.

I’ve been a relatively passive observer of some of the weekly meetings between developers who are assembling the machine, and our compliance people who understand how the machine is supposed to function. During one particularly painful discussion explaining why benefits are included but they may not be included but still need to be included while not being included in any calculation, I mentioned that if I were an adjuster, I would be finding a different job before trying to navigate that labyrinth. Two of my compliance people, both with many years of adjusting experience, started to laugh and told me they did.  

It was a great example of the challenges we face as a heavily regulated industry working across more than 50 unique and independent systems. And it also served as an illustration of the broader hurdles we are facing in trying to attract young and engaged talent to staff workers’ compensation in the future. Young people coming out of school have learned that there is normally “an app for that,” where the tedious chores of life have been programmed down to a few clicks on a phone. Throw one of these wage statement forms – make that 5 forms from different states – in front of them and they’ll be headed for the hills. Or the nearest Starbucks with decent WiFi. Whichever.

We’ve been agitating in this blog for simpler, streamlined processes, yet as the CEO of a company that survives on making the complex more manageable, I recognize the irony of that position. In conversations about developing a single FROI that could be used in all 50 states, I have often jokingly thanked some of my regulator friends for the failure to achieve that objective. After this project, I think I will have to include AWW calculations in my repertoire of light sarcasm. This process makes multiple FROI’s look like a walk in the park.

As for our calculator, when it launches it will be available to support claims in Florida, Texas, California, Illinois, and New York. Other states will be coming online, essentially being added in general order of population. It won’t be perfect for every file, but for situations with relatively consistent data, it should be a huge time saver. Maybe we can save one Gen Z’r from heading to the hills.

Or perhaps I am just California Wage Statement Dreamin’…

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