Minimum wage increasing January 1, 2016

Reminder about minimum wage increase and how this could impact your workers’ comp benefits.

Michigan employees will see an increase in the minimum wage rate from $8.15 to $8.50 on January 1, 2016. The rate will continue increasing by 25% each year until 2018 when it reaches $9.25.

We are strong advocates for a living wage and support this change. However, increasing the minimum wage could have an impact on your workers’ comp benefits.

Workers’ Comp Rate

Disabled employees are supposed to get 80% of their after-tax average weekly wage. This amount is capped at 90% of the state-wide average weekly wage, currently $910.71 per week.

The idea is to limit wage loss benefits to what most people in Michigan are actually paid. This means high wage earners are stuck with an arbitrary maximum regardless of their income. The maximum weekly rate for 2015 is only $820.00.

Increasing the minimum wage will result in a higher state-wide average weekly wage. This means potentially greater workers’ comp benefits even if a person’s salary remains the same.

Wage Earning Capacity

Insurance companies can also use a higher minimum wage against injured workers. Michigan’s workers comp law permits a reduction for “wage earning capacity.” The offset for an entry level or unskilled job would be set at minimum wage.

Insurance companies hire vocational experts to say jobs are available. A person may be told he or she can find work in a field never considered before. It does not matter whether a real job is actually offered.

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:

State of Michigan – Average Weekly Wage Chart

Photo courtesy of Creative Commons, by r-z.

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