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Moore: Is Maximum Weekly Benefit Fair to Injured Workers?

  • National

One of the most common disputes I received in my claims/risk management career was when I had to explain a workers' comp maximum weekly benefit to a high-earning injured worker.

James Moore

James Moore

You can check out the chart supplied by the Social Security Administration that lists all the workers' comp maximum weekly benefits, including a history of the maximums since 1985.

American Samoa is one of the jurisdictions without a maximum limit on weekly benefits.

Georgia example

Not to pick on the Peach State, which has a great college football program, but I had to find an example state.

The workers' comp maximum weekly benefit as of July 1, 2022, is $725. Now, that may look low, but please remember that it is a tax-free benefit. Check out this J&L article on supplements for a good discussion on workers' comp benefit calculations.

The $725 equates very roughly to $1,087.50 average wages taxed. Workers' comp in Georgia (as in most states) is calculated at two-thirds of the average weekly wage.

If one multiplies the $1,087.50 by 52 weeks, the amount of $56,550 would be the yearly amount of maximum wages before the maximum goes into effect. Does that seem low to you?

The other side of the coin is that allowing no workers' comp maximums would cause an employer to pay massive premiums due to the higher claims values. I am not choosing sides here, only providing an example of the involved numbers.

Truck driver example

According to Indeed.com, the average U.S. trucker has a yearly salary of $71,254.  Georgia truckers make 1% above the national average, or approximately $72,000.

So, if a Georgia trucker with average pay is injured on the job, the math goes like this:

  • $72,000 ÷ 52 = $1,384.61 average weekly earnings.
  • $1,384.61 x 2/3 AWW = $923.07 workers' comp payment rate.
  • $923.07 – $725 = $198.07 difference in comp rate.

I rounded off a few numbers. One can easily see that an average Georgia trucker injured on the job today would have a $198.07 excess over the maximum amount. This equates to a $297 dollar reduction in taxable wages per week. 

I did not write this article to debate the current workers' comp laws. I know that workers' comp is there to hold everything together for an injured employee and as an encouragement to return to gainful employment.

How does a workers' comp claims adjuster explain this to a good employee who was injured on the job?

How often does this situation occur for injured employees when the workers' comp maximum weekly benefit kicks in? Truckers tend to make higher wages, but that should not cause a $297 wage reduction if they are injured on the job.

This blog post is provided by James Moore, AIC, MBA, ChFC, ARM, and is republished with permission from J&L Risk Management Consultants. Visit the full website at www.cutcompcosts.com.

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