September 28, 2024
Vote No on Question 2
By Brooke Thomson President and CEO In 2023, Associated Industries of Massachusetts honored Worcester Technical High School and…
Read MoreQuestion
I saw in a recent HR Edge article that the Paid Family and Medical Leave (PFML) maximum benefit has increased for 2023. I know this is based in part on the State Average Weekly Wage (SAWW). How is the SAWW calculated?
Answer
SAWW is a little-known but important standard under Massachusetts law.
The SAWW is important because it governs benefits paid to employees or individuals under the unemployment insurance (UI) law, workers’ compensation law and Massachusetts Paid Family and Medical Leave law. The state average weekly wage is calculated every year by the director of the Department of Unemployment Assistance (DUA) and published annually on October 1.
The DUA director determines the total wages reported on UI contribution forms during the 12-month period ending on March 31 of a given year. That total is divided by the average number of monthly insured employees for the 12 months ending March 31 yielding the average annual wage. The average annual wage is then divided by 52 to establish the state average weekly wage. That number is rounded to the nearest cent.
For 2023 the SAWW is $1,765.34, up from $1,487.78 in 2022 – an increase of approximately 8.5%. The SAWW typically outpaces inflation because the formula is based only upon those employees who are insured for unemployment purposes. Excluded from the calculation are some non-profit and governmental employees who typically have lower wages, resulting in a somewhat inflated SAWW.
Here is the manner in which the three significant state benefits are linked to the SAWW:
While most employees do not receive the maximum benefit under any of these laws, it is helpful to understand one of the key factors in determining the value of benefits in premiums or contributions.
AIM members with questions about this or other human-resources issues, or interested in a detailed review of its payroll practices may the AIM Employer Hotline at 1.800.470.6277.