How Are Wages Lost Due to a Work Injury Calculated?
November 15, 2023 Posted In Work-related injury
Work injuries not only cause physical and emotional distress but also often result in financial challenges due to lost wages during recovery. In California, the calculation of lost wages involves several factors to ensure fair compensation for workers who have suffered injuries on the job.
Temporary Total Disability Benefits
California’s workers’ compensation system provides temporary total disability benefits (TTD) to compensate workers for lost wages during the period they are unable to work due to a job-related injury. These benefits are calculated based on two-thirds of the worker’s average weekly earnings, subject to maximum and minimum limits set by state law.
Average Weekly Earnings
The average weekly earnings are determined by looking at the worker’s wages over a specified period, typically the five to 18 months preceding the date of injury. This includes various forms of income, such as regular wages, overtime, and certain bonuses.
Maximum and Minimum Benefit Amounts
California sets maximum and minimum limits on TTD benefits. The maximum limit is adjusted annually, and it represents the highest amount a worker can receive per week, even if two-thirds of their average weekly earnings exceed this limit. Conversely, the minimum limit ensures that workers with lower earnings still receive a baseline level of compensation. As of January 1, 2023, the minimum TTD is $242.86, and the maximum is $1,619.15.
Duration of Temporary Disability Benefits
TTD benefits are generally available for up to 104 weeks within a five-year period from the date of injury. However, certain severe injuries or conditions may qualify for extended benefits beyond this initial period.
Permanent Disability Benefits
If a work injury results in permanent impairment, compensation may be provided through permanent disability benefits. The calculation of your benefit amount considers your wages at the time of your injury, the date of your injury, your disability rating, and your reduced future earning capacity. This rating is expressed as a percentage and determined by a medical evaluator based on the degree of impact the injury has on your ability to work. For example, a 100% rating is a total disability rating, whereas below 100% is a partial disability rating.
Third-Party Claims
Calculating lost wages in a third-party claim due to a work injury involves a different process than in a workers’ compensation claim. In a third-party claim, the injured party pursues compensation from someone other than their employer, such as a negligent third party (e.g., subcontractor, manufacturer):
Documenting Lost Income
The first step is to thoroughly document the income lost as a result of the work injury. This includes gathering pay stubs, tax returns, and any other relevant financial records that demonstrate the individual’s pre-injury earnings.
Calculating Past Lost Wages:
Past lost wages are calculated based on the actual earnings the individual would have received if not for the injury. This can include regular wages, overtime, bonuses, and any other forms of compensation that were impacted by the injury.
Estimating Future Lost Earnings
If the injury has long-term or permanent effects on the individual’s ability to work, future lost earnings may be estimated. This involves considering factors such as the individual’s age, occupation, career trajectory, and the extent of their injuries.
Consideration of Benefits
Workers’ compensation benefits may offset the calculation of lost wages. This offset is taken into account when determining the overall compensation for lost income.
Expert Opinions
In some cases, financial and vocational experts may be consulted to provide opinions on the individual’s earning capacity before and after the injury. These experts can offer insights into the economic impact of the work injury.
An Attorney Can Help
Calculating lost wages after a work injury is critical to your ability to recover without further financial stress. An experienced San Bernardino work injury lawyer can help you evaluate the value of your claim and ensure you receive the benefits and compensation you deserve. Arrange a free consultation today.