How to calculate the weekly comp rate and what percentage of salary can a disabled employee expect under workers’ comp in Michigan.
We often describe workers’ comp as a safety net for people who are hurt on-the-job. Employees are entitled to lost wages if they are unable to work because of a workplace accident. These payments are based upon their average weekly wage. Does workers’ comp pay full salary in Michigan? No, only a percentage will be paid using a math formula. Employees can expect 80% of their after-tax salary or approximately 60% of gross pay under workers’ comp.
Insurance companies frequently make errors, and they are never in our client’s favor. It is a good idea to double check math calculations to make sure every dollar owed is paid. Workers’ comp does not pay full salary in Michigan but your compensation should be 80% of the employee’s after tax average weekly wage. This is based upon actual earnings and should not be estimated using hourly rate. We have seen insurance companies pay hundreds of dollars less per week simply because they did not get wage records from the employer. Items like overtime, discontinued fringe benefits, and even second jobs must be factored into the calculation.
Does workers’ comp pay full salary in Michigan?
Workers’ comp does not pay full salary in Michigan. Disabled employees should receive 80% of their after-tax average weekly wage (AWW), subject to a state maximum. This calculation should include money for overtime, discontinued fringe benefits, and even second jobs. It is based upon the highest 39 paid weeks out of the 52 weeks before the work accident occurred.
Tables published by the WDCA show the weekly comp rate based upon average weekly wage. Tax filing status and number of dependents also influence how much is paid. Any money paid under workers’ comp should be income tax free.
Lost wages are capped at 90% of the state-wide average weekly wage (SAWW), regardless of income. Though workers’ comp doesn’t pay full salary in Michigan it is important to note that the maximum weekly comp rate is $1,048.00 for 2022. It does not matter if a person was working as a general laborer or quarterback for the Detroit Lions. The idea is to limit weekly payments to what most people get under workers’ comp. It is not exactly fair to high wage earners who take a big cut in their salary.
Discontinued fringe benefits cannot be included if the weekly comp rate exceeds 2/3 of the SAWW. This amount is $775.86 for 2022.
Watch out for insurance companies who use something called post-injury wage earning capacity (PIWEC) to reduce or stop weekly checks. This is when the insurance company says a person can find alternate employment but does not actually provide a job. The labor market survey is rarely a fair representation of what type of employment is truly available. We recommend speaking with an experienced workers’ comp lawyer should this occur.
Injured while on-the-job in Michigan? Contact our lawyers now
If you were injured while on the job in Michigan and are wondering if workers’ comp will pay full salary or are curious to know what your average weekly wage would be, call us now, or fill out our contact form for a free consultation. There is absolutely no cost or obligation. Our attorneys are here for you.
Our attorneys have been exclusively helping injured workers in Michigan for more than 35 years. Our attorneys can help you better understand Michigan work injury laws and what happens after someone has been hurt on the job. To see what our own clients have to say about the caring, compassion, and communication they received from us, you can read in their own words about their experience here on our testimonials page from clients we have helped.
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) 201-9497 for a free consultation today.