Term Of The Day – Minimum Compensation Rate
Most states have a minimum threshold of Workers Comp benefits regardless of their wage rate. If the injured employee’s Workers Compensation rate falls below this figure, it is increased to the minimum.
For instance, if an employee earns $ 8 per hour and works 5 hours per week for an employer their Average Weekly Wage equals $40.00 per week. In most state the Workers Compensation weekly benefit is 2/3 of the Average Weekly Wage. Two thirds of $40 equals $26.67 which is the workers’ comp benefits rate.
In most states the minimum compensation is $30 or a similar figure, so the employee would receive $30 per week.
One of the complicating factors originates from the employee have multiple jobs. Some states figure in the other jobs wages also. Some do not under certain circumstances.
There has been an ongoing debate on whether or not volunteer employees should be paid the minimum rate.
The minimum rate can vary quite a bit from state to state. Most of the states that I handled as an adjuster had a minimum of $30 per week. This does seem to be a very low number. I still agree that volunteers should be paid some type of minimum compensation rate when injured on the job.
One of the debatable areas of increasing the compensation rate to a minimum is when permanent partial disability (PPD) benefits are paid to an injured worker. One suggestion I had seen a long time ago was to have no PPD benefits when someone is injured that requires the adjustment to the minimum compensation rate.
The only time I was ever fined was due to not paying a volunteer TTD benefits.
The lowest I have ever paid was $18 a week.
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