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Written by: Matthew Flammia
As we head into the summer season, there is no better time for a refresher on the calculation of average weekly wages for seasonal employees.
A seasonal employee is one whose primary employment is during “peak” times versus “slack” times. When looking into this issue, it is important to remember a couple of guidelines that have been established by the North Carolina Courts:
In North Carolina, there are five methods for calculating an injured employee’s average weekly wage.
Method 1: Is to be used when the employee worked for the employer 52 weeks prior to the date of injury and did not miss more than seven (7) consecutive days at one or more times. The average weekly wage is simply calculated by dividing the total wages over 52 weeks by 52.
Method 2: The employee worked for the employer 52 weeks prior to the date of injury, but missed seven (7) consecutive days at one or more times over those 52 weeks. To calculate the average weekly wage under Method 2, calculate the total wages over 52 weeks and divide by the number of weeks remaining after subtracting one week for each seven-day period missed.
Method 3: Is to be used when the employee worked for the employer less than 52 weeks prior to the date of injury. To calculate the average weekly wage under Method 3, divide the total wages of the employee by the total number of weeks the employee worked for that employer.
Method 4: Is to be used when the employee has worked for employer for only a short period of time or employment has been casual intermittent and it is impractical to use Method 1, 2 or 3. To calculate the average weekly wage under Method 4, you would use a similar situated employee with the same grade paid in a similar position during the 52 weeks prior to the date of injury.
Method 5: Is the “catch-all” provision that may only be used when the prior Methods produced an unjust result to either party. There is no prescribed Method to calculate the average weekly wage under Method 5.
Generally, for seasonal workers, also sometimes categorized as temporary, intermittent or casual employees, we will look to Method 5 and use a hybrid approach to determine the average weekly wage.
For seasonal workers, the average weekly wage would be calculated by dividing the amount the employee earned by 52 weeks, no matter the length of employment. Using this method will account for the peak and down time during the season and rest of the year. Otherwise, if you only used the weeks that an employee worked or earned wages, the seasonal position would be turned into a full-time, year-round employment. Again, the Courts have held that the average weekly wage should be fair and just to both parties.
Around this time of year, North Carolina’s agriculture business tends to increase, which in turn leads to an increase in seasonal agricultural employees. One type of specialized seasonal agricultural employees are called H-2A workers. This program is administered by the North Carolina Growers Association (NCGA), and in fact, "approximately thirty percent (30%) of NC agricultural employees rely on the H-2A agricultural visa program to keep farming.” Calculating an H-2A’s average weekly wage should be performed in the same manner as seasonal employees, but there are some things to remember regarding these employees.
With any agriculture employee, if the employment contract provides compensation in lieu of wages (e.g. wage withholding for lodging) these allowances are deemed to be part of the employee’s earnings and should be included within the average weekly wage calculation. Generally, this is done by considering the fair market value of such lodging in the area and incorporating it into the employee’s earnings.
Finally, with agricultural employees, and commonly seen with H-2A workers, there may be a joint employment contract. H-2A workers in North Carolina are under a joint employment contract managed by the NCGA. These employees may work for any employer participating in the H-2A program with the NCGA, and therefore, the average weekly wages for the H-2A employees must consider the wages the employee earned from all of the joint employers that were part to the contract. This is not an exception to the general rule, but instead, reflects the relationship of the employee’s multi-employer contract.