One of the most often asked questions in my practice pertain to the payment of time loss benefits. When you are injured on the job and unable to work, understandably, one of your main stressors is the uncertainty of whether you will be able to continue to meet your ongoing financial obligations (mortgage, rent, car payment, utilities, etc.). Workers’ compensation insurance is supposed to provide you wage replacement for temporary total disability or temporary partial disability during these times, provided certain conditions are met. Unfortunately, insurers frequently fail to fulfill their payment obligations. Worse yet, when you call the adjuster to ask about time loss, you get a bunch of confusing industry jargons (e.g., average weekly wage, TTD rate, three-day waiting period, etc.) thrown at you with no clear answer given. If you believe you are entitled to time loss but not receiving payment or underpaid, you should consult an attorney. The accuracy and timeliness of time loss payments are often subject to litigation.
So how much should your time loss check be? Most injured workers are not paid based solely on a daily or weekly wage. Statistically speaking, most injured workers are paid hourly at varying hours (called irregular wages). As such, the calculation of time loss benefits is prescribed by the administrative rules written by the Workers’ Compensation Division (WCD). Since I started processing claims in 2005, the rules have been revised and rewritten several times. Your date of injury determines which set of rules apply to your particular claim. This blog is based on the version of administrative rules that went into effect on October 1, 2020.
Stated in the simplest terms, the insurer pays you based on what is called Average Weekly Wage (AWW). If you receive an irregular wage (e.g., paid hourly at varying hours) from your employer, the general rule is the insurer is required to obtain your wage records for the period up to 52 weeks before the date of injury to come up with a weekly average earnings rate, which is your AWW. For instance, if you were injured on September 29, 2020, and you earned a total of $52,000.00 in gross wages between October 1, 2019 and September 28, 2020 (exactly 52 weeks), then your AWW should be $1,000.00 ($52,000.00 divided by 52 weeks). However, your adjuster may not timely request your wage records, or your employer may delay in getting the wage records to the insurer, which may result in a miscalculation of your AWW. In some cases, the miscalculation may never get corrected, and you could be underpaid thousands of dollars in time loss benefits throughout the life of your claim.
If your AWW is $1,000.00, you should receive 66.67% of this amount in time loss payment each week. The amount you actually receive or net each week is commonly referred to as your TTD rate. In this scenario, your TTD rate is $666.70. Your workers’ compensation benefits are not taxable. So the net amount of your time loss check (paid bi-weekly) should be relatively close to the net amount of your paycheck at the time of injury (assuming your payroll is also processed on a bi-weekly basis; subject to some exceptions such as 401k contribution). There is a statutory maximum TTD rate which is currently $1,454.24. And your time loss benefits are subject to an annual cost-of-living adjustment on July 1 of each year (determined based on the State’s Average Weekly Wage).
The above-outlined example is based on the general rule. As with any general rule, however, there are many exceptions. What if you received a pay increase just weeks before your injury? In that case, simply averaging out your pre-injury earnings over a 52-week period would not accurately reflect your actual wage at the time of injury (since you were paid at a lower rate during the majority of that time period). There is a special calculation method in the administrative rules that addresses this situation. What if you had some gaps in your earnings before the injury? There is also a specific calculation method for that scenario. You need to know there are many other special calculation methods in addition to the general rule to address a variety of different scenarios. The information contained in this blog is not intended to be comprehensive. If you have questions about time loss, please contact our office to schedule a free legal consultation.
Tune in for our next blog post on the topic of timeliness of time loss payments.
*Please be advised the materials on this page are for informational purposes only and should not be interpreted as legal advice or opinion.