Workers Comp Maximum Weekly Benefit – Fair To Injured Workers? – The Numbers
One of the most common disputes that I received in my claims/risk management career was when I had to explain a Workers Comp Maximum Weekly Benefit to a high-earning injured worker.
You can check out the chart supplied by the Social Security Administration here that lists all the workers comp maximum weekly benefits including a history of the maximums since 1985.
American Samoa is one of the jurisdictions without a maximum limit on weekly benefits.
Maximum Weekly Benefit – Georgia Example
Not to pick on the Peach State that has a great college football program, but I had to find an example state.
The workers comp maximum weekly benefit as of 07/01/22 = $725.00. Now that may look low, but please remember that it is a tax-free benefit. Check out this J&L article on supplements for a good discussion on workers comp benefit calculations.
The $725.00 equates very roughly to $1,087.50 average wages taxed. Workers comp in Georgia (as in most states) is calculated at 2/3 of the Average Weekly Wage.
If one takes the $1,087.50 * 52 weeks the amount of $56,550 would be the yearly amount of maximum wages before the maximum goes into effect. Does that seem low to you?
The other side of the coin is allowing no workers comp maximums would cause an employer to pay massive amounts of premiums due to the higher claims values. I am not choosing sides here – only providing an example of the involved numbers.
Real World Numbers – Truck Driver Example
According to Indeed.com, the average US trucker has a yearly salary of $71,254. Georgia truckers make 1% above the national average or approximately $72,000.
So, if a Georgia trucker with average pay is injured on the job, the math goes like this:
- ($72,000 /52) = $1,384.61 average weekly earnings
- $1,384.61 * 2/3 = $923,07 workers comp payment rate
- $923.07 – $725.00 = $198.07 difference in comp rate
I rounded off a few numbers. One can easily see that an average Georgia trucker injured on the job today would have a $198.07 excess over the maximum amount. This equates to a $297 dollar reduction in taxable wages per week.
I did not write this article to debate the current Workers Comp laws. I know that workers comp is there to “hold everything together” for an injured employee and as an encouragement to return to gainful employment.
How does a workers comp claims adjuster explain this to a good employee who was injured on the job?
How often does this situation occur for injured employees when the workers comp maximum weekly benefit kicks in? Truckers tend to make higher wages, but that should not cause a $297 wage reduction if they are injured on the job.