Part 2 of 3: Workers’ Comp Formula

Calculation of wage loss benefits when the insurance company decides an employee has a post-injury wage earning capacity.

Michigan workers’ comp law has undergone changes in the last few years. The most controversial is a reduction for phantom wages. This is when the insurance company decides someone has a post-injury wage earning capacity (PIWEC).

PIWEC as an employee’s ability to find a new job with his or her partial disability. The problem is that insurance companies make this decision on their own using defense vocational experts. It does not matter whether the partially disabled employee has found a new job.

Supporting a family on just 80% salary is tough enough. A further reduction based upon PIWEC is downright awful. Here is an example of how Michigan families suffer under workers’ comp.

Example of PIWEC reduction

Beth is an ER nurse who lives in Warren. She tore her rotator cuff while lifting a patient and surgery has been recommended. Workers’ comp benefits are paid at a weekly rate of $716.79 based upon a $1,200.00 average weekly wage.

Her employer does not have a job that she can perform with restrictions. The insurance company decides to hire a vocational expert to perform a transferable skills analysis and labor market survey. It is determined that she could find a nursing job that does not involve lifting patients. These jobs pay $600.00 per week.

Beth submits her resume to several hospitals and clinics but is not hired. She now only gets 80% of the difference between her full weekly rate and PIWEC. Her weekly comp checks are reduced to $236.79 based upon phantom wages from a job that does not exist.

Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 201-9497 for a free consultation today.

Related information:

Why your “wage earning capacity” matters under Michigan workers’ compensation

Photo courtesy of Creative Commons, by Got Credit.

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