Joe works for a large apartment complex as a building engineer. The complex offers three-, two-and one-bedroom units for monthly rental rates of $3,000, $2,500 and $1,750, respectively. Joe is paid an annual salary of $52,000. In addition, his employer furnishes him with a rent-free one-bedroom apartment. Joe tore the rotator cuff in his right shoulder one day while struggling to remove a broken dishwasher from a tenant’s apartment. The workers’ compensation claim adjuster sent him an agreement form to begin his disability payments based on an average weekly wage of $1,000. Since Joe’s annual salary breaks down to a weekly wage of $1,000, he figures the form is correct and he should sign it. Joe figured wrong.
The Virginia Workers’ Compensation Act provides that “[w]henever allowances of any character made to an employee in lieu of wages are a specified part of the wage contract, they shall be deemed a part of his earnings.”The calculation of Joe’s weekly wage should include both his salary and the value of his rent-free lodging. Instead of receiving weekly compensation benefits based on a $1,000 weekly wage, Joe’s entitlement should be based on a weekly figure of $1,403.85 ($1,000 in salary + the weekly value of the free apartment). That results in a weekly disability entitlement of $935.90 instead of only $666.67.