Discontinued fringe benefits and workers’ comp

Michigan employees hurt on-the-job need to know about discontinued fringe benefits and why it could increase or decrease their weekly checks.

Michigan workers’ comp law requires payments to employees hurt on-the-job. This includes medical care, vocational rehabilitation, and lost wages.

Calculation of lost wages is based upon an employee’s average weekly wage over a 39-week period. The disabled worker should receive 80% of the after-tax value subject to a statewide maximum.

Fringe benefits should also be included in the average weekly wage calculation. Some examples include discontinued health insurance premiums, pension contributions, bonuses, and holiday pay.

Fringe benefits are limited to the extent they result in a weekly benefit amount which is greater than 2/3 of the statewide average weekly wage. Items that are not considered fringe benefits and represent a fundamental aspect of a person’s wages have no such limit.

It is important to speak with a workers’ comp lawyer to make sure the amount paid is correct. Here is an example of how a small distinction between fringe benefits and wages could have a big impact.


Bob Smith is a factory worker for a large automotive company. He suffers a torn rotator cuff while throwing parts into a bin. Surgery is covered under workers’ comp and it is expected that he will be disabled for a period of 16 weeks. He is single with 0 dependents.

Bob has a cash average weekly wage of $1,500.00 and receives a productivity bonus of $200.00 each week. If his productivity bonus is considered a fringe benefit, his benefit amount should equal $815.35. He gets no credit for the productivity bonus since his benefit amount is already higher than 2/3 the statewide average.

If his bonus is considered part of his fundamental wages, weekly checks should equal $899.38. This small distinction would add $1,344.48 over 16 weeks of disability.

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) 316-8033 for a free consultation today.

Related information:

Maximum weekly comp rate for 2018

Photo courtesy of Creative Commons, by kenteegardin.

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