Workers’ compensation benefits are based on disability. The amount of disability is based on wages and the ability to earn them.
- In workers’ compensation, disability means the loss in an employee’s ability to work.
- There are three main categories in calculating an employee’s workers’ compensation payout: if the employee can’t work at all, if they can do some work, or if they suffered a permanent injury.
- No matter what the injury is, most people will be limited to 500 weeks of compensation.
A Workers’ Compensation Example
When David worked as an electrician in a manufacturing plant, he made a good living. But then he slipped off a ladder and fell 25 feet. He hoped his workers’ comp would make up for what he lost. He spent long days in physical therapy and long nights in lots of pain. He thought the operation on his back was the worst thing he would have to go through, but that he could get back to some work at the plant and it would all be over. The nurse they sent with David to the medical appointments was pushy, and she kept asking the doctor to let him go back to work.
David’s workers’ comp checks came regularly, even though he used to get a lot of overtime; his checks were only two-thirds of what he made in a 40-hour week. David didn’t ask for anything else from the insurance adjuster, even for her to pay for him to go back and forth to the doctor. It wasn’t until two years after the accident that the doctor said he could return to work. But David didn’t believe that he could lift 50 pounds regularly, like the doctor said he could. And he had trouble standing since his back ached.
David’s doctor released him with a 15% rating to his back, and a 7% rating on his hand. The doctor said that he didn’t think that a rating on David’s shoulder was necessary and that he didn’t think that David would need any more treatment, not even any medication. David didn’t really understand what the whole rating thing was about. But David did start to worry when the insurance adjuster only offered a settlement of half of what he had made in the year before he was hurt! She gave some numbers that she said were based on the ratings from the doctor. David didn’t understand. Why didn’t she offer any money at all for his pain and suffering?
In workers’ comp, disability means the loss in an employee’s ability to work.
Workers’ Compensation Benefit Calculations
- If the employee can’t work at all, he is entitled to weekly workers’ comp payments.
- If he can do some work, he is entitled to 2/3 of the amount he is losing from his average weekly wages.
- If he has a permanent injury, compensation for his injury is tied to the number of his average wages when he was working.
- The workers’ compensation rate determines the amount that the rating will be worth. A “rating” is the amount of permanent damage a doctor determines that the injury has caused to a part of the body.
- You cannot receive benefits for pain and suffering in a workers’ compensation claim.
These numbers change depending on the person and can make for some big differences: a worker who is 55 who has a permanent injury to his dominant right hand, and can’t do the work he has done for 30 years, will have a better case for receiving ongoing weekly benefits, than a 25-year-old with the same injury and an advanced education. The 25-year-old worker has less “disability” because of the less of an effect on his ability to work.
What you can get in a workers’ comp case is about medical treatment and the nature of the permanent injury. But no matter what the injury is, most people will be limited to 500 weeks of compensation.
Workers’ Compensation Rates
As long as David is out of work, the workers’ comp insurance company has to pay weekly benefits based on all of David’s income – not only on a 40-hour week when he worked overtime.
That “workers’ comp rate” should equal two-thirds of the average weekly wages paid over the year before the injury. That amount is very important and not just because it buys groceries and puts gas in the car (But let’s not minimize that part!). There are some special circumstances that can change that amount, such as missing eight days of work in a row or more. But David didn’t have any of those, so he was missing out on more than $120 a week for two years – and who couldn’t use another $12,480?
Workers’ Compensation Ratings
The workers’ comp rate also determines the amount that the rating will be worth. A “rating” is the amount of permanent damage a doctor determines that the injury has caused to a part of the body. Each body part gets a separate number. Ratings are given only when the injured employee has finished healing. We call this point MMI, for “maximum medical improvement.”
Calculating the Rating Numbers
Doctors can have different opinions on the rating numbers. Once the doctor has given a rating opinion, it is a matter of going to the workers’ comp laws and looking up the number of weeks a particular body part is worth. That number is then multiplied by the percentage of the rating and by the workers’ compensation rate. If a number is too low, the worker loses money every week AND in the rating – and that might be all the injured worker could receive for the injury, depending on the facts of the case.
Here, the fact that David’s average wages were reported at too low a level, making his workers’ comp rate $120 short each week. So his rating – if he receives this rather than a final settlement or continuing weekly benefits for his time out of work or reduced wages – will be low too. A person’s back is listed at 300 weeks of compensation in case of a total loss. Fifteen percent of 300 weeks is 45 weeks. Multiply that by $120 – the amount David is losing – and you get $5400. Certainly worth asking for, right?
You Have the Right to Receive a Second Opinion on Ratings
Injured workers have a right to get a second opinion on ratings. If David asks for one, a medical visit to have a doctor examine him and review his medical records must be paid for by the insurance company, within certain limits on fees.
David’s rating of 15% to his back and 7% on his wrist, as well as the lack of a rating for his shoulder, could be looked at by a doctor of his own choice. Ratings can be averaged to determine the award of money, and the Industrial Commission has to approve the final amount. But David has to be careful! If the new doctor determines a lower rating is called for, that could be averaged with the original one bring the overall rating down, costing David some major money. The money David could be missing is unknown but could number in the thousands of dollars.
Mileage and Prescriptions
When you aren’t getting what you were when you were working, every little bit of money counts.
David has been paying for gas and wear and tear on his 10-year-old truck to get the medical treatment he needed. David always traveled more than 20 miles round trip to his appointments, so he meets the minimum mileage requirement to get travel reimbursement on each trip. The money he is be missing from this misstep is more than $600.
“Pain and Suffering”
David has pain, and he has suffered, but he gets no money for either in his workers’ comp case. That’s the law.
Most people have heard that settlements contain money for pain and suffering. That is true with some kinds of legal settlements, like car accidents, but it is not true for workers’ comp settlements. Let me repeat – there is NO way to get money for pain and suffering for injuries that are only due money from workers’ comp. There’s a lot to be considered when negotiating a final settlement amount, and future treatment is one very important thing. David may need yet another doctor to consider his future treatment needs. David needs to talk to a lawyer about his options.
Other Workers’ Compensation Benefits
David, who is nearing his 60th birthday, knows about Social Security disability. He thought about applying but hasn’t yet called or gone to the office. Social Security could award him substantial benefits that would increase his income. That money could even increase when David settles his workers’ comp claim – a settlement that is in question with the low ball offer he received from the insurance company!
But David should consult with an attorney about how this works and his chances of receiving benefits. The process can take a lot of time and can require specialized knowledge only an attorney who is representing claimants with Social Security claims would have.