Course 13: Interactive Exercise Workers Compensation & Lost Wage Example

Transcription

1 Course 13: Interactive Exercise Workers Compensation & Lost Wage Example You may use the research software, ERI Salary Assessor, to help you calculate lost wages. This simulation will show you how to find a salary, annual or hourly pay, at a given date, adjusted for annualized increases at varying levels of years of experience. If you follow along using ERI Salary Assessor, the numbers you get may be different. This is because you are doing the analysis at a different date and the data you are using has been updated. To calculate Back Pay, open ERI Salary Assessor, and click on the Browse button next to the position title field.

2 The Search Jobs window opens. Type in the employee s last job title (in this case, Adminstrative Assistant) in the Search field. Select that job title and then click OK. After the job title is selected, additional company criteria must be defined. To do so, click on Data That Affects Salaries.

3 The Salary Adjustments window opens. Click the Browse button next to Location (city). The Select Area window opens. Type the first letters of the company s location, Houston, Texas, in the search field. Select this location and click OK to return to the Salary Adjustments screen.

4 In the Salary Adjustments window, click on Browse button next to the Industry. The Browse Industries window opens. Click the Search Industries button to search for a particular industry name.

5 Type petroleum in the Search text field and click the Search button. Select the appropriate industry for the company, Petroleum Refineries, and then click OK. After returning to the Salary Adjustments dialogue window, enter the valuation date (in this case, 1/1/2014) in the Salary Planning Date field and then click on Adjustments to add the merit increase rate.

6 Set the merit increase rate in the Planning Date Salary Adjustments screen by entering 2.5% for all rows in the Rate column. Then click OK. After all the additional company criteria is inputed in the Salary Adjustments window, click OK. (Note, Revenue field is used as criteria for executive positions only; hence, it is not used in this example.)

7 Additional job criteria, such as years of experience, must be entered. Click the Customize button below Years of Experience to change the parameters desired. In the Customize Table window, enter the range of the number of years that is desired (1-6 in this case) and then click OK.

8 After returning to the main data screen of the Salary Assessor, you can select other criteria that may affect the salary. One of these is the pay percentile into which an employee falls. If the employee should be compensated at 15% above the market mean, you may view that by clicking the Customize button below Percentiles and selecting 65% in the drop-down list. You may also select between survey Mean or Median. In this case, we will use the default view. The criteria that will be used for this scenario will be 5 years of experience and the survey mean to align to the company s policy to pay at the market rate. The five-year mean salary that we have come up with is $40,379. This number is a little different from the value used in the Problem Solving section on page 15, because this simulation was created on a different date. Your result for this example may also differ slightly depending on when you do this simulation, because the data gets updated quarterly. So, we have just determined the market rate for an Administrative Assistant with 5 years of experience in Houston, Texas on January 1, 2014, the valuation date. This helps us to calculate the back pay.

9 It is also possible to get the hourly rate if that is needed. Click the drop-down menu below Pay Period and select Hourly. Now we would have the hourly rate if we needed it.

10 The next step is to calculate the Front Pay. Click on Data That Affects Salaries, and change the Salary Planning Date to the employee s end date (retirement date), in this case, 1/1/2015. Then click OK.

11 Compensation data for the Administrative Assistant job as of the end date (retirement date) will be shown. Again, this number is a little different from the value used in the Problem Solving section on page 15, because this simulation was created on a different date. Since the employee is partially disabled and returned to work in a different job, the Receptionist salary must be included in the calculation. Click the Browse button next to the Position Title field to add this information.

12 In the Search Jobs window, change the Position Title to the new job of Receptionst and click OK. Select the appropriate salary for the employee s Years of Experience (in this case, 1 year of experience).

13 Now, we have all the information to determine the future lump sum of the front pay calculation. Click the Next button on the problem statement page to see all the calculations needed for a Permanent Partial Disability lost wage scenario. You can use what you have learned in this scenario to find the salary information for Scenario 2, Death, and Scenario 3, Wrongful Termination.