Minimum wage increase January 1, 2017

Reminder about minimum wage increase and how this could impact Michigan workers’ compensation benefits.

Michigan employees will see an increase in the minimum wage from $8.50 to $8.90 per hour on January 1, 2017.

We are strong advocates for a living wage and support this change. However, increasing the minimum wage could have positive and negative effects on workers’ compensation benefits.

Positive

Disabled employees are supposed to receive 80% of their after-tax average weekly wage under workers’ compensation. Weekly checks are capped at 90% of the state-wide average weekly wage, currently $935.00 per week.

The idea is to limit workers’ compensation benefits to what most people in Michigan actually earn. This means high wage earners are stuck with an arbitrary maximum regardless of income. The maximum weekly rate for 2016 is just $842.00.

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

Negative

Insurance companies can also use a higher minimum wage against disabled employees. This is an unintended consequence of the 2011 legislative reforms. Michigan’s workers’ compensation law now permits a reduction for “wage earning capacity.”

Insurance companies hire vocational experts to say minimum wage and entry level jobs are readily available. A person may be told he or she can work in a field never considered before. It does not matter whether a real job has actually been 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:

New Minimum Wage for Michigan Employees

Photo courtesy of Creative Commons, by Mike Schmid.

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