The California worker’s compensation system, like others throughout the country, has been considerably impacted by the coronavirus pandemic. There is no doubt that 2020 was a game-changer for the entire industry.
Did you know that the State Average Weekly Wage in California (also known as SAWW) increased over 13.5 percent for the year ending Mar 31, 2021? According to the California Workers’ Compensation Institute, this will lead to a surge in permanent total disability (PTD) and temporary total disability (TTD) rates for job injury claims in 2022, as well as many other California workers’ compensation benefits, which are linked to SAWW increases.
Temporary Total Disability
A California employee who has sustained an injury on the job is eligible for temporary total disability (TTD) benefits if their claim has been accepted and they have been designated disabled by a doctor.
According to the CWCI, the latest data from the US Department of Labor reveals that because of the disproportionate loss of low-wage jobs in the state during the COVID-19 pandemic, California’s SAWW climbed by 13.52 percent from $1,383 in the initial quarter of 2020 to $1,570 in the initial quarter of 2021.
You should know that employers face sizable challenges, such as how to properly classify employees and manage payroll and new laws that allow workers to more easily and quickly submit claims that allege workplace exposure to the COVID-19 pandemic.
As a result, this will have a considerable impact on worker’s compensation benefits payments. This is mainly because the TTD/PTD maximum rate will increase to $1,539.71 (the current rate is $1,356.31 per week) by $183.40 per week for worker compensation claims with injury dates either on or after Jan 1, 2022.
Keep in mind that state law also links weekly TTD/PTD rates (minimum) to SAWW increases. This is why those minimums will increase to $230.95 per week from the current $203.44 per week for claims that have 2022 injury dates.
It is worth noting that the California Division of Worker’s Compensation has also confirmed the new TTD/PTD rates for injury claims in 2022. The division has issued a Newsline that announced the new rates.
Also, starting on Jan 1, 2022, various other worker’s compensation benefits for injuries either on or after Jan 1, 2003, as well as installment payments on all death claims, will go up because of the SAWW increase. Some of these benefits include TTD paid 2 years or more after a workplace injury, PTD, and life pension payments for injuries.
Underpayment of benefits usually results in several penalties. Did you know that many insurance companies in California deny legitimate workers’ compensation claims to reduce their costs? In order to discourage this type of behavior, many states, including California, impose stiff penalties and fines for unreasonable claim denials, delayed payments, and refusals to pay.
This is why CWCI encourages claims administrators in the state to carefully review changes in benefit rates with their legal counsel in order to assure that adjustments are accurate and appropriate.
DWC Announces Temporary Total Disability (TTD) Rates for 2022
According to the Division of Workers’ Compensation (DWC), the 2022 maximum and minimum TTD (temporary total disability) rates will increase on Jan 1, 2022. Remember that the maximum TTD rate in California will increase from $1,356.31 to $1,539.71 a week. On the other hand, the minimum TTD rate will also increase from $203.44 to $230.95.
TTD minimum payments are established minimum TTD payment amounts. This means you’re guaranteed a minimum amount regardless of your previous earnings.
If you have been hurt or injured at work and have been considered unable to work by your doctor or treating workers’ comp physician, you’re entitled to get temporary total disability benefits. These benefits help replace your lost income while you are recovering from your work injuries.
Note that Labor Code Section 4453(a) (10) is relevant here as it requires the minimum and maximum weekly earnings on which TTD is based increase by a sum equal to the percentage increase in the SAWW (State Average Weekly Wage) as compared to the last year.
We can define the statewide average weekly wage as a calculation of average wages that employers pay to workers in California for a set period of time. The SAWW is also covered by unemployment insurance as reported by the US Department of Labor for California for the twelve months ending Mar 31 in the year before the work injury.
Keep in mind that in the twelve months ending Mar 31, 2021, the SAWW climbed from $1,383 to $1,570—a significant increase of 13.52 percent. Here is the calculation of the 2022 SAWW increase:
(SAWW in 2022 –SAWW in 2021)/ SAWW in 2021
$1,570 minus $1,383 = 187/1383 = 13.52%
Here is the calculation of TTD rate (minimum) for 2022:
Earnings (minimum) for 2022 x SAWW raise x 2/3 = 2022 minimum TTD rate
$305.16 x 1.135 = $346.42 minimum TTD earnings times 2/3 = $230.95 minimum TTD rate for 2022.
On the other hand, here is the calculation of the TTD rate (maximum) for 2022:
2022 Maximum earnings x SAWW increase times 2/3 = 2022 maximum TTD rate.
$2,034.47 x 1.135 = $2,309.56 maximum TTD earnings times 2/3 = $1,539.71 max rate
According to Labor Code Section 4659(c), employees with a date of work injury either on or after Jan 1, 2003, who are still receiving permanent total disability (PTD) or life pension (LP) benefits also have the right to get their weekly PTD or LP rate adjusted based on the latest SAWW.
Hire a Worker’s Compensation Lawyer
TTD is an important benefit designed to compensate and help you while you’re not able to work and are under active medical treatment because of a work injury. Keep in mind that the amount and duration can vary considerably, depending on your pre-injury earnings and date of injury.
In general, getting workers’ comp benefits for a viral illness, such as the coronavirus, can be both challenging and tricky. This is why you must have an experienced and competent attorney, such as James E. Latimer, on your side. For dedicated and effective representation in your workers’ compensation case, contact California reliable workers’ comp lawyers at the Law Offices of James E. Latimer. To learn more about your legal rights and options, call us now to schedule a consultation at 510-444-6555.