Penalizing low wage earners is a tragedy

How phantom wages are used to hurt families who must rely upon Michigan workers’ compensation benefits.

8499205674_8061563ddd_mI participated in a facilitation last week. This is when an impartial magistrate attempts to informally resolve a case. It’s a great opportunity to test your proofs and see about your chances at trial.

The defense attorney brought up the usual wage earning capacity argument. This is when an insurance company says a person can work and uses “phantom wages” as an offset. This was a weak argument because my client is a high wage earner and still entitled to substantial benefits.

The facilitation reminded me about how low wage earners suffer the most under Michigan’s current workers’ compensation system. Here is another example of how fuzzy math can be used to hurt families.

Last week we blogged about how a person earning $14.00 per hour would receive just 19.2% of total wages or $107.30 per week with a phantom minimum wage offset. This number would be even worse if the person was only earning $10.00 per hour. His weekly rate would be $11.97 per week. Just enough for coffee and a sandwich.

Now let’s see how a higher wage earner with a wife and child is affected. Imagine a man who was earning $35.00 per hour with an average weekly wage of $1,400.00. His weekly rate should equal $820.000, maximum rate for 2015. The insurance company makes the same argument about unskilled minimum wage work and says he can earn $326.00 per with his disability. His new weekly rate is $565.51. This represents a little more than 1/3 of his gross but he can at least buy some groceries.

Why is the system punishing low wage earners who need workers’ compensation the most? It is time that we bring fairness back and provide an adequate level of benefits.

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 (855) 221-2667 for a free consultation today.

Related information:

Can you support a family on $107.30 per week?

Photos courtesy of Creative Commons, by Maura Teague.

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