“Noa” When to Include Bonuses in Your AWW Calculations, By Chelsea England Leonard, Associate, Orlando

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A request for an increase in the average weekly wage (AWW) is one of the most common requests in a Petition for Benefits.   Calculating the AWW seems easy enough – add up thirteen weeks of earnings and divide by thirteen.  While calculating the AWW may seem elementary, it can be tricky when determining what constitutes   earnings.

A common issue arises when the a claimant is paid bonuses. Florida’s First District Court of Appeal recently addressed bonuses in Noa v. City of Aventura and Florida League of Cities, No. 1d21-0549 (Fla 1st  DCA 2022).

In this case, the claimant, an employee at the City of Aventura Police Department, was injured at work on February 27, 2020. She subsequently received an annual merit bonus on August 6, 2020.  The claimant filed a Petition for Benefits seeking an increased AWW to include the annual merit bonus. She relied on section 440.14(1)(a), Florida Statutes which provides that the AWW is “one-thirteenth the total amount of  wages earned…during the 13 weeks…[preceding the accident].” [Emphasis added].  In contrast, the employer/carrier argued the bonus should not be included because it was not earned until her anniversary date.

                The court held that a quarter of the claimant’s bonus should be included in the AWW calculation.   The court relied on the statutory definition of “wages,” which defines wages as the  “money rate at which the service rendered is recompensed under the contract of hiring in force at the time of the injury… .” § 440.02(28), Fla. Stat.   Here, the claimant’s pay plan for 2019-2020 included the payment of merit bonus. However, the bonuses were not automatic: employees were not eligible for the bonuses until their anniversary date.  Additionally, satisfactory performance for 52 weeks prior to the evaluation was required. The court reasoned that the claimant qualified for the bonus because she eventually received it.  Likewise,  the purpose of the calculation is to establish  “the value of the employee’s lost ability to earn future wages.”

                From a practical standpoint, speak to the employer early in the life of a claim to identify the wages the claimant is entitled to under his or her contract of employment. Obtain a copy of the contract of employment and ask questions regarding how and when bonuses are earned.  As always, do not hesitate to  your defense attorney with any questions on what types of bonuses or extraneous wages should be included in the AWW. The earlier we can establish the correct AWW, the better!