Workers' Compensation & Wage Loss Benefits
An injured worker must be disabled for seven consecutive days before benefits are due and owing. If a worker is off work for less than seven days, then no wage loss benefits are owing, however, the worker is entitled to medical benefits for the work injury.How are Wage Loss Benefits Calculated?
An injured worker receives 80 percent of the after-tax value of his or her wage loss. To calculate the weekly benefit rate, we must first determine the injured worker’s average weekly wage (AWW). The AWW is based on the average of the highest 39 of the last 52 weeks of wages before the date injury. If the employee worked for each of the 52 weeks before the injury but earned a different rate for each of those weeks, we would look at the 39 highest weeks. We would then determine the average by taking the total wages for those 39 highest weeks and dividing them by 39. Finally, to determine the amount of the benefit rate, we calculate 80% of the after-tax value of the AWW.
The workers’ compensation agency annually publishes tables that calculate 80% of the after-tax value. The law provides that the determinations made by this table are conclusive and binding upon the parties.Are Fringe Benefits Included?
Under certain circumstances, the value of fringe benefits that are discontinued is added to the value of the cash wages to determine the worker’s average weekly wage. Discontinued fringe benefits include, but are not limited to, health insurance, vacation pay, holiday pay, pension contributions or 401k. There is a limit to when discontinued fringe benefits can be added.Are Workers’ Compensation Benefits Taxable?
Workers’ compensation benefits are not subject to either state or federal income tax.
What if an injured worker is employed at more than one job? If a worker is employed by more than one employer at the time of the injury, the earnings from both employers are added together to calculate the average weekly wage. The worker’s benefits are based on the total wages from all employments.What if an Injured Worker Finds Light Work That Pays Less Than the Job on Which he was Injured?
If the job offered is a lower paying job, the worker will continue to receive workers’ compensation benefits based upon the difference in wages.
Does an injured worker have to accept light work offered by his employer? If the injured worker is offered a job he can do within restrictions, then the worker must do the job or risk losing wage loss benefits. The work offer must be reasonable. This means that it must be work the employee can perform, poses no clear threat to the worker’s health, and is within a reasonable distance from the employee’s residence.Must the Employer Offer Light Work?
The employer is not required to offer an injured worker employment within his restrictions. However, if no light work is offered, the employer or its insurance company must continue to pay the worker his full workers’ compensation benefits.What if an Injured Worker Tries to Return to Work but is Unsuccessful?
If the injured worker returns to work, either light duty or his regular work, and is unable to continue because of the work injury, he is entitled to reinstatement of his workers’ compensation benefits. If this occurs, the injured worker should report his difficulties to his employer and should see his doctor to modify work restrictions.Does an Injured Worker Have to Look for Work Within his Restrictions?
Yes, unless totally disabled by a doctor, an injured worker has an affirmative duty to look for work within his restrictions. If he does not actively look for work, his wage loss benefits may be denied.