March 19, 2018

AZ Industrial Commission Provides Update on Calculation of Avg Monthly Wage Maximum

Tucson, AZ – The Arizona Industrial Commission recently released the following update regarding the calculation of the Average Monthly Wage in a worker’s compensation claim:

As most of you know, the Industrial Commission of Arizona is required under A.R.S. § 23-1041 to adopt the maximum that will be used in the setting of the average monthly wage in a workers’ compensation claim. The statute requires the Commission to take this action by August 1st of each year to be effective for the following calendar year. Under the current version of the statute, the Commission is required to use “the Arizona mean wage . . . using the bureau of labor statistics occupational employment statistics data coded for all occupations for the prior calendar year.” A.R.S. § 23-1041(E).

In the last legislative session (Fiftieth Legislature, Second Regular Session), the Legislature amended A.R.S. § 23-1041 to change the specific index used to adjust the maximum average monthly wage from the “Arizona mean wage . . . coded for all occupations” to the “employment cost index.” The effective date for this new amendment is August 2, 2012. Because the current version of the statute directs the Commission to adopt a new maximum average monthly wage “not later than August 1 of each calendar year,” the Commission will be required to use the current version of the statute (which specifies the Arizona mean wage) to establish the maximum average monthly wage for calendar year 2013.

The Commission wanted to provide advance notice of this issue as everyone’s expectation (including Commission staff’s) was that we would be using the new index to calculate the 2013 maximum. But, because the Legislature adjourned when it did, the new statute becomes effective after the date the Commission is required to take action. As another “heads up,” it appears that the amendment to A.R.S. § 23-1041 changing the index to use for this calculation does not specify which data or series within the index should be used. Before the Commission can use this index for future calculations, we will need to obtain clarification of this issue. The Commission will work with its stakeholders to determine the best way to obtain this clarification.

Source: AZ Industrial Commission

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