Workers’ Disability Compensation Agency (WDCA) releases Michigan workers’ compensation rates for 2020 and how to calculate the weekly benefit amount.
Michigan workers’ compensation rates for 2020 are set by law. The maximum weekly comp rate for 2020 is $934.00. It is the weekly amount a disabled employee should receive when unable to work because of getting hurt on-the-job. It is limited to 90% of the state-wide average weekly wage, which is $1,037.10.
The idea is to limit disabled employees to what most people in Michigan are earning. It does not matter how much a disabled employee was earning before getting hurt. Unfortunately, this maximum punishes high wage earners who are stuck with this cap.
Watch out for insurance companies who simply estimate the weekly rate. Here is how to double check insurance company math and make sure the correct Michigan workers’ compensation rates for 2020 are being used so that the correct amount is being paid.
Step 1: Calculate the average weekly wage
Calculate the average weekly wage (AWW) using pay stubs from the 52 paid weeks before getting hurt. Make sure to include overtime and bonuses in the gross amount. The value of discontinued fringe benefits can also be used under specific circumstances. We recommend organizing 52 weeks of pay stubs in order from highest gross amount to lowest gross amount. Select the highest 39 pay stubs and add these amounts together. Divide this total amount by 39 to calculate the average weekly wage. Use all paid weeks if working 39 weeks or less for this employer.
Step 2: Use benefit table to find weekly Michigan workers’ compensation rates for 2020
Disabled employees should receive 80% of their after-tax average weekly wage. Tables published by the WDCA show the Michigan workers’ compensation rates for 2020 based upon AWW, tax filing status, and number of dependents. Disabled employees can also make use of an online calculator. Wage loss benefits under workers’ compensation are income tax free.
Step 3: Resolve any math errors
Math errors occur when the employer does not cooperate and fails to provide wage records. Do not let the insurance company estimate the weekly rate by just using hourly wage. Our experience shows that disabled employees are leaving money on the table when this occurs. It could also impact settlement value if the weekly rate is not corrected prior to the start of negotiations. Give pay stubs directly to the insurance company if the employer refuses to cooperate. Speak with an experienced workers’ compensation lawyer if you believe weekly checks are too low.
Michigan law also permits insurance companies to pay less based upon post-injury wage earning capacity (PIWEC). They use “phantom wages” from jobs that are not even be available to reduce the weekly amount paid. It is critical to speak with an experienced workers’ compensation lawyer if this occurs. Vocational assessments by insurance company representatives can be challenged in court. A good-faith job search can be used to prove that no employer will accept current restrictions.
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.