Michigan Workers’ Comp Lost Wages FAQs: What You Need To Know
How you get paid while you’re off of work and why you could be receiving less wage loss than you’re entitled
If you’re injured while on the job, you can receive wage loss benefits — but many injured employees are not receiving the correct rate. Here you will learn everything you need to know about your workers’ comp lost wages claim in Michigan.
For help from one of our attorneys now, call (855) 221-2667, or you can fill out our contact form for a free consultation. There’s no cost or obligation, and we can ensure that you’re receiving all of the wage loss benefits you’re entitled to under the law.
- What workplace injury benefits can I receive?
- Does workers’ comp cover lost wages?
- What is wage loss compensation?
- Am I receiving the correct amount?
- How to calculate workers’ compensation wages?
- How does workers’ comp pay for lost wages?
- What if I’m found to be only partially disabled?
- What is my wage earning capacity and why does it matter?
- Can the amount of wage loss benefits I receive change?
- When does workers’ comp start paying for lost wages?
- Can you claim lost wages on taxes?
- What happens if I’m receiving the wrong workers’ comp lost wages rate?
Q. What workplace injury benefits can I receive?
Workers compensation is a compromise between employee and employer interests. You don’t have to prove negligence to get compensation, but you are limited in what benefits you can receive.
Pain and suffering is not available. This might seem like an unfair system but the amount of benefits paid can be substantial.
Q. Does workers’ comp cover lost wages?
A. Yes, workers’ comp covers lost wages in Michigan. The amount paid should equal 80% of their after-tax average weekly wage. This is based upon the highest 39 paid weeks out of the 52 weeks before the accident. Overtime, discontinued fringe benefits, and second jobs should be included in the calculation.
Q. What is wage loss compensation?
A. Wage loss compensation is a financial lifeline that compensates you for the wages you didn’t receive while off of work recovering from your personal injuries. It is a Michigan workplace injury benefit that you are entitled to after being injured on-the-job.
Q. Am I receiving the correct amount?
A. We frequently run into individuals who have no idea how much they’re supposed to be receiving in workers’ comp lost wages benefits. These individuals often assume they are receiving the correct weekly rate — without checking the math themselves.
You should know that insurance companies frequently make mistakes and those mistakes are never in your favor. Our attorneys have actually seen injured employees receiving thousands of dollars less than the law requires.
Q. How to calculate workers’ compensation wages?
A. To calculate how much workers’ compensation wage loss benefits you should be receiving, you must first compute your average weekly wage. This is an average of the highest 39 weeks of the 52 weeks preceding your work injury. If you have worked less than 39 weeks, just divide the total amount that you have earned by the total weeks you have worked.
You should include overtime, premium pay, and bonuses in the average weekly wage calculation. You may also be able to include discontinued fringe benefits, such as the value of health insurance, to increase the average weekly wage.
You can also increase your average weekly rate if you were working a second job. Employers and insurance companies will never tell you about that. Your average weekly wage will be based upon the total wages from both jobs. This could substantially increase the amount of wage loss benefits available to you.
Q. How much does workers’ comp pay for lost wages?
A. The amount workers’ comp will pay for lost wages will be 80 percent of your after-tax average weekly wage. To calculate this amount, you must use the tables published by the State of Michigan.
You will need to know how many dependents you have and your tax filing status. Find the average weekly wage column and select the appropriate number of dependents and tax filing columns. This will you give you your weekly benefit rate. In general, this amount is usually about 60 percent of your gross weekly income.
You should also know that the amount of wage loss benefits available is subject to a specific maximum. The highest weekly amount allowed in 2012 was $775. This is based upon the state average weekly wage of $860.34. No worker is allowed to receive compensation above 90 percent of the state average weekly wage.
This can be devastating for a high wage earner who is now faced with a substantial loss of income.
Q. What if I’m found to be only partially disabled?
A. Recent changes to Michigan’s workplace injury law have complicated how wage loss benefits are calculated. If it is determined that you are only partially disabled and have a wage earning capacity, your wage loss benefits can be reduced or stopped. It does not matter if you are actually working or not. This change in the law is ripe for abuse and you should contact an experienced lawyer if this happens.
Q. What is my wage earning capacity and why does it matter?
A. The issue of wage earning capacity can be very complicated. Think of wage earning capacity as your ability to earn wages in other employment taking into consideration your work-related injury. Your employer and its insurance company may think you can work but you might not be able to find a job within your restrictions. The insurance company wants to find that you have a wage earning capacity to reduce the amount that needs to be paid.
Q. Can the amount wage loss benefits I receive change?
A. Your rate is generally fixed at the time of your injury. It stays the same even if the economy changes, your job is eliminated or your employer files bankruptcy. You are entitled to wage loss benefits as long as you are disabled and cannot work.
You might also be entitled to differential wage loss benefits if you return to work but at less pay. Differential wage loss is the difference between what you’re earning now and what you could earn before the injury.
If your employer or its insurance company decides that you are only partially disabled then your wage loss benefits can be changed. You will be sent to a vocational rehabilitation counselor for an employability and wage earning capacity analysis. You will be asked about your educational background, work history, and job search efforts. The vocational rehabilitation counselor will then review medical records, perform a transferable skills analysis, and give an opinion about whether you can find other work.
The vocational rehabilitation counselor is hired by the insurance company and they have an agenda. The employability and wage earning capacity analysis is not always a fair assessment. You may be told that you can work in a field that you have never considered or told that a job exists when it does not. If you are scheduled to meet with a vocational rehabilitation counselor, it is a good idea to call a lawyer immediately.
Q. When does workers’ comp start paying for lost wages?
A. Entitlement to workers’ comp lost wages benefits does not begin until an employee has been disabled for at least 7 days. Payment is supposed to be made weekly and should be mailed by day 14. However, statistics published by the Michigan Workers’ Disability Compensation Agency show it can take on average of 17 days for checks to be sent.
Q. Can you claim workers’ comp lost wages on taxes?
A. Workers’ comp lost wages payments made under are income tax free. This is because these payments are calculated using the “after-tax” value of an employee’s average weekly wage. We recommend consulting a tax professional to determine if a tax return needs to be filed and what must be claimed.
Q. What happens if I’m receiving the wrong workers’ comp lost wages rate?
A. Many disputes occur because your employer or its insurance company are paying weekly benefits at the wrong workers’ comp lost wages rate. If you suspect that you are receiving the incorrect rate, you must call an experienced worker compensation attorney for help. An experienced attorney can take a look at your wage records and tell you whether you are receiving the correct rate. For help from an attorney now, call us at (855) 221-2667. There call is free and the advice is free.
Insurance companies often will fail to include your overtime or bonus pay. They will also tell you that other work is available when it is not.
Sometimes, the insurance company will use the wrong number of dependents or the wrong tax filing status. These errors can dramatically affect the amount of wage loss benefits that you receive.
Because of a recent Michigan Supreme Court decision called Stokes v. Chrysler, some employers and insurance companies are reducing wage loss benefits based upon a hypothetical ability to earn wages in other employment. You should speak with an experienced attorney immediately if this occurs.
Are you receiving as much wage loss as you’re entitled?
Even if you are currently being paid workplace injury benefits, it’s always a good idea to have your claim reviewed. Our attorneys can ensure that you’re receiving the correct wage loss benefits today.
Call us at (855) 221-2667, or fill out our free consultation form. There’s no fee or obligation.