State Mandated Maximum Benefit Rates
The general Workers Compensation formula for weekly benefit rates = Average Weekly Wage (AWW) * .6667. The weekly benefit rates usually have a maximum.
I had been told in my career that the maximum benefited the employer two-fold:
- The high wage earning employee would have an incentive to return to work as they were not being paid the full 2/3 of their AWW.
- The employer’s E-Mod would not be destroyed with claims from higher wage earners
I do agree that maximums have their place such as the maximum number of weeks of benefits.
This is a typical chart of Workers Comp state maximums:
- 2008 — $786.00
- 2009 — $816.00
- 2010 — $834.00
- 2011 — $836.00
These are usually calculated from the State Average Weekly Wage. If we use the present State Maximum $836 * 3/2 * 52 = $65,208. That means that anyone making more than $65,208 will lose 2/3 of every dollar above that figure. If the injured employee is the sole breadwinner, the results might be disastrous.
Some companies will supplement the difference between what the high wage earners would have made had they not been on Workers Compensation benefits. This is not necessarily advisable as supplements alter the intentions of Workers Comp. ‘
Some of our recommendations to client companies are:
- Offer short term and long term disability policies such as AFLAC
- Review all job descriptions to make sure there are modified jobs the injured employee can perform on a full time or part time basis
- Allow the employee to use their sick and vacation pay to supplement the shortfall
The maximum rates are in my opinion needed as to not wreck an employer’s E-Mod. The employer, however, needs to have at least a voluntary program to supplement the high-wage earner employees.
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