7.3.2.1 What Is Included in Wages?

• Jurisdiction: Arizona

An employee’s average monthly wage must include not only wages and salary, but anything of value received as consideration for work constituting real economic gain.^[94] This includes such items as tips^[95] and overtime (if it is a normal and usual characteristic of the employment),^[96] but not reimbursement for actual expenses incurred,^[97] union benefits paid directly to a union trust fund,^[98] or profits from investments.^[99]

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^[94]Matlock v. Industrial Comm’n, 70 Ariz. 25, 215 P.2d 612 (1950). See also Mail Boxes, Etc., U.S.A. v. Industrial Comm’n, 181 Ariz. 119, 888 P.2d 777 (1995). The claimant, a sole proprietor, obtained sole proprietor coverage for himself as permitted by A.R.S. § 23-901 (5)(i). After he sustained injuries to his knees in an industrial accident, the Industrial Commission set his average monthly wage at $1,650, the amount that had been agreed to by the claimant and the carrier when the claimant purchased the coverage. The claimant’s injuries resulted in permanent impairments, but when the carrier closed the claim, it recomputed his average monthly wage at $0 for purposes of assessing his entitlement to permanent...