What Wage Loss Benefits Are Available?
Disability begins on the first day that you are unable to work. By law, no wage-loss benefits are paid for the first three calendar-days after the disability begins. If the disability continues for 10 calendar-days or longer, the compensation is backdated and owed from the first day you were unable to work.
Temporary partial disability (TPD) benefits
Temporary partial disability (TPD) is a wage-loss benefit payable to employees who are back to work but earning less than their pre-injury average weekly wage. It is payable at two-thirds of the difference between what the employee earned at the time of the injury and the current earnings. The benefits are payable only if the employee is employed. Be careful not to confuse “not being employed” with “being employed, but on vacation.” If an employee who is collecting TPD takes one week of vacation, the employee is still employed and TPD should be paid for that week at an average weekly rate. TPD benefits can be paid concurrently with permanent partial disability (PPD). PPD is discussed in more detail later in this section.
During the years, the laws may have included limitations on the duration of TPD benefits. It is important to remember that the date of injury controls, so limitations — if any — in effect on the date of the injury affect the length of payment of TPD.
For injuries occurring on or after Oct. 1, 1992, TPD is limited to 225 weeks of paid benefits or 450 weeks after the date of injury, whichever occurs first. All periods of TPD for that date of injury are counted toward these limitations, except benefits paid during an approved training plan.
Calculation of the rate
As stated above, the TPD rate is two-thirds of the difference between the employee’s average weekly wage at the time of the injury and the current earnings. The benefits are subject to the maximum compensation rate for TTD, but not the minimum. In rare situations, an employee’s TPD rate would be reduced if their current wage plus their current TPD rate exceeds 500 percent of the statewide average weekly wage.
For example, an employee earning $500 a week at the time of the injury is now earning $200 a week. The wage loss is $300 a week and the unadjusted TPD is two-thirds of that, or $200 a week. The $200 is multiplied by any annual adjustments that would apply.
If the employee is earning an inconsistent amount of wages during the period for which TPD is due, the insurer may require wage verification before it makes payment of TPD. Keep in mind that if the employee’s wages are consistent for a period of time, the insurer should not require this information before making payment.
Benefits are due within 10 days of when the employee or employer sends wage verification.
Permanent total disability (PTD) benefits
Permanent total disability (PTD) is payable to employees who are never able to return to gainful employment. The PTD rate is usually calculated using the same method as TTD and is subject to the maximum rate as TTD but not the same minimum rate. In addition, if an employee was a part-time worker, the compensation is computed based upon a normal work week for that occupation.
Procedure for discontinuing wage-loss benefits
Your employer or insurer must provide you with a written notice of its intention to suspend or discontinue benefits and file a copy of the notice with the department. The notice must indicate the proposed date of discontinuance and clearly indicate the reason, with all documentation of supporting facts attached.
If you object to the proposed discontinuance, you should contact one of the workers compensation attorneys at Heimerl & Lammers immediately. You can request a conference (this must be done within 12 days) or start and objection procedure. Benefits usually must be paid through the date of the conference. There are other options if the 12 deadline is missed, but these other options will take more time.
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Temporary total disability (TTD) benefits
Temporary total disability (TTD) benefits are paid during the period an injured employee is totally unable to work due to the effects of the work-related injury the weekly compensation rate is generally two-thirds of an employee’s average weekly wage at the time of injury, subject to statutory minimums and maximums. TTD benefits cannot be paid concurrently with permanent partial disability (PPD) benefits. See discussion on PPD.
Benefits are typically paid based on a five-day work week with each day considered to be 0.2 weeks of compensation. Occasionally, an employee may work a different number of days a week, such as four, six or seven. In these situations, each day of TTD is computed by multiplying the weekly TTD rate by the fraction (or decimal equivalent) each day of work represents.
For example, if an employee worked four days a week, calculate the TTD rate at 0.25 weeks of compensation for each day owed. The six- and seven-day-a-week workers would be entitled to 1/6 or 1/7 of a week of compensation, respectively, for each day of TTD.
Calculation of the rate for regularly scheduled workers
As stated earlier, the TTD rate is two-thirds of the average weekly wage the employee earned at the time of the injury, subject to maximums and minimums. Presently, the maximum rate is $1,098.54 a week and the minimum is $130 or the employee’s actual average weekly wage, whichever is less. For dates of injury on or after Oct. 1, 1995, cost-of-living adjustments are made on the fourth anniversary of the injury. If the employee works frequent or regular overtime throughout the year, the overtime earnings need to be included in the average weekly wage to correctly calculate the compensation rate.
For example, an employee earns $300 a week and $100 a week in frequent and regular overtime. Calculate the TTD rate based on an average weekly wage of $400. Always review case law involving overtime to determine if it should be included in the average weekly wage on a specific claim.
If an employee has more than one employer on the date of injury, wages from all employers must be included when determining the employee’s average weekly wage.
Earnings in addition to salary, such as declared tips, the value of room and board, etc., may be considered as part of the employee’s wages, and if so, should be calculated as part of the average weekly wage.
Note: An employee is only entitled to receive TTD if there is a loss of wages from all jobs. If an employee with multiple employers is only disabled from one job, TTD is not payable. Instead, temporary partial disability (TPD) would be payable. See discussion on TPD.
Other than regularly scheduled workers
For part-time or irregularly scheduled employees, compute the average weekly wage based on the employee’s earnings during the past 26 weeks prior to the injury. Include in the earnings any vacation or holiday pay the employee received during that period. (Generally, this does not include lump-sum payouts of previously accrued vacation.) Here are the steps to take:
- Compute the average daily wage. Divide the total amount the employee earned (including vacation and holiday pay) during the past 26 weeks by the total number of days the employee actually worked (including days of paid vacation and holidays) during that time period.
- Compute the average number of days worked each week. Divide the total number of days actually worked (including days of paid vacation and holidays) during the past 26 weeks by the number of weeks the employee actually worked (including weeks of paid vacation and holidays) during that time period.
- Compute the average weekly wage. Multiply the average daily wage by the average number of days worked a week.
For example, if an employee earns an average of $55 a day and works two days a week, the average weekly wage is $110. This is the amount used to calculate the TTD rate.
Remember, when doing these calculations; only include the number of weeks in which the employee actually performed the duties of the job or weeks of paid vacation or holidays.
For example, if an employee worked 20 of the prior 26 weeks, the total days worked are divided into 20 weeks, not 26 weeks.
Generally, when the injury occurs during the middle of a work week, it is either not included in these computations or counted as a partial week under step 2 above.
For workers whose hours are affected by seasonal conditions, such as those in the mining, construction or other industries, the average weekly wage is never less than five times the daily wage as calculated above.
While many voluntary uncompensated employees are not covered by workers’ compensation laws, for those that are covered, their average weekly wage is based on the usual wage for paid employees performing similar services.
TTD benefits generally end when:
- the maximum number of weeks of TTD benefits have been paid and you are not in an approved retraining program. Currently 130 weeks;
- you have returned to appropriate work;
- Maximum medical improvement (MMI)
- 90 days have passed since you were notified that you have reached maximum medical improvement; Maximum medical improvement (MMI) is defined as the date after which no further significant recovery from or lasting improvement to a personal injury can be reasonably anticipated, regardless of subjective complaints. After the date of MMI has been validly determined, the insurer does not need to request any further determinations of MMI unless the employee becomes medically unable to continue working
- 90 days have passed since the completion of an approved retraining plan;
- You do not cooperate with an approved rehabilitation plan;
- You are able to work, but refuse gainful work within your physical restrictions;
- You are able to work with restrictions, but fail to diligently search for appropriate work;
- You are able to work, but withdraw from the labor market;
- Your health care provider releases you to work without any physical restrictions caused by the work injury; or
- You retire for reasons other than you injury.
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