Nevada: Are Your Benefits Calculated Correctly?

Nevada: Are Your Benefits Calculated Correctly?

When the adjuster sends you a benefit check if you are out of work due to your work accident, she should also send you a letter telling you how she calculated your average monthly wage (AMW). The AMW is the amount used to calculate your out-of-work compensation benefits and your permanent partial disability award.  The higher the AMW, the greater the compensation benefits, and the greater the lump sum PPD award.

It is difficult for injured workers to know whether the AMW established by the adjuster for your claim is correct unless you have two pieces of information. First, you need the wage verification form that should have been completed by the employer when requested by the adjuster.  That form asks the employer to list all gross income earned for 84 days before the date of your accident.  You can ask the adjuster for a copy of the wage verification form and then check the income listed against your paycheck stubs.  Remember to look at your gross wages.  You should request this form in writing from the adjuster, and always keep a copy whenever you make a request.

Secondly, you need to know what the rules are for calculating AMW.  Those rules are contained in NRS 616A.065 (definition of AMW), and in the regulations adopted by the DIR at NAC 616C.420 - NAC 616C.447.  Ordinarily, the insurer will calculate AMW by going back 84 days before the date of the accident and by averaging those gross earnings.  However, if the claimant thinks that he earned more during a year with the same employer, he can ask the adjuster to look at AMW using his one year earnings history, or his full period of employment.  The adjuster is obligated to use the highest AMW resulting from the use of those two methods.

There are several other regulations that address different circumstances where calculating AMW using the two most typical methods will not be a fair representation of the injured worker's average monthly wage.  The Nevada Supreme Court just published a new opinion that discusses the regulations that provides that the rate of pay on the date of the accident or the onset of the disease should be used to calculate the average monthly wage where the employee is promoted to a different job just before the accident.   In City of North Las Vegas v. Warburton, 127 Nev. Adv. Op. No. 62 (October 5, 2011) (Free Download), a pool lifeguard had just been promoted to pool manager when she was injured at work.  She hadn't actually received higher wages based on her new rate of pay yet.  The Court held that her benefits should have been calculated using the rate of pay for the primary job she was working when she was hurt, and that would have been the pool manager position. (Lexis.com subscribers can access the Lexis enhanced version of the City of N. Las Vegas v. Warburton, 2011 Nev. LEXIS 79 (Nev. Oct. 6, 2011) decision with summary, headnotes, and Shepard's.)

If you just changed jobs with the same employer or had just gotten a raise, then you will want to look closely at how the adjuster calculated your average monthly wage.  Keep in mind that there is a maximum average monthly wage that is set by the state each fiscal year, beginning on July 1 annually.  When the adjuster sends a determination letter setting your AMW, usually at the beginning of the claim, you are given 70 days from the date of that letter to file an appeal (Request for Hearing form with the Department of Administration.)  Even if you did not file an appeal within 70 days of the date of that letter, you may still have the right to contest the AMW if you think that your average monthly wage should be increased.  You may then be entitled to additional retroactive benefits based on the higher AMW, and your PPD award will be greater.

Effective July 1, 1970, the law  (NRS 616C.427), allows an injured worker to contest the AMW determination even after the 70 days has run if the claim is still open and the injured worker hasn't received a lump sum PPD award yet.     If you had unusual employment circumstances and you think your AMW was calculated too low, before your claim is closed and before you are rated for impairment, ask a knowledgeable Nevada workers' compensation attorney to please review your AMW calculation with you.   The sooner the AMW is corrected, the better.

Copyright 2011 and reprinted with permission by Virginia L. Hunt, Esq.

Read Virginia Hunt's blog, Nevada Workers' Compensation Law Blog.

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