A reader asked this question: “I was injured on the job in Southern California. I was seen by a doctor and given work restrictions, but had to wait while my job accommodated those modifications. Because I had to wait three days while my workplace made those changes, I lost three days of work wages. Is my employer responsible for paying me for those three days that I lost because of their delay? If not, when do employers actually owe injured workers lost wages?”
Like most questions our readers ask, there are quite a few variables here to consider. The state in which you live determines many of them; others are universal. Let’s break them down below.
What Are Lost Wages?
The term “lost wages” refers to the income you’d normally earn while working at your job before your workplace injury. The US Department of Labor defines lost wages as any income normally subject to payroll taxes. This includes your salary, any overtime you would have earned, sick leave, vacation leave, tips, and any bonuses you’d have normally received. Other benefits, such as IRA distributions, pensions, annuities, unemployment compensation, state workers’ compensation benefits, and Social Security benefits, for example, are specifically excluded.
What Is Workers’ Compensation?
Workers’ compensation is distinctly different from unemployment insurance.
The first important difference is that state laws require most employers to provide and pay for workers’ compensation insurance. Legally, your employer cannot deduct any fees from your work paychecks to pay for this policy’s coverage. It only pays out if you, the eligible employee, suffer a work-related injury or illness while doing your job. Workers’ compensation does not replace any lost income if you’re laid off, fired, or hurt while you’re off the clock. If approved, workers’ compensation typically covers medical expenses and may include lost wages only after your state’s waiting period ends.
Because workers’ compensation is an employer-provided insurance policy, the insurer makes all decisions about when and how that coverage applies. In most cases, your employer isn’t the one who decides how much to pay or what that policy covers. Rather, the insurance company managing your policy must approve or deny your claim and conform to state and federal laws.
How Do I Know What My Employer’s Workers’ Compensation Policy Covers?
Every state has its own unique regulations regarding workers’ comp insurance, including:
- Coverage amounts for workers’ compensation packages
- Which types of insurance your state requires for specific employers
- Which employees may be exempt from automatic coverage requirements (such as Realtors, federal employees, or contractors)
- How much and for how long an employer must pay benefits to eligible injured workers
- What penalties each state can levy against employers who fail to follow legal guidelines
Additionally, there are different types of workers’ compensation benefits. The first type covers medical bills only, but not lost wages. It usually applies when you need less than a week off work to fully recover from your accident. The second type covers lost wages if you still can’t work once your state’s required waiting period ends. Generally, both state and federal laws require employers to cover “reasonable” medical bills for on-the-job injuries.
What Happens if I Cannot Work for Weeks or Months While My Injury Heals?
Workers’ compensation benefits to cover your lost wages generally fall into four categories:
- Temporary Partial Disability (TPD) — TPD applies if you can return to work only with modifications. (In other words, your employer must make accommodations for you to perform your job duties.) TPD usually the difference between your pre-injury paychecks and what you earn while working with restrictions. For example: If you break your leg and cannot drive a forklift as required, your employer might reassign you to a clerical job. If your forklift-operating position paid $20/hour but your new one pays $15/hour, your TPD would be $5/hour.
- Temporary Total Disability (TTD) — Temporarily unable to work at all, but plan to return to your old job? Then you might qualify for TTD. First, there’s a brief waiting period while they evaluate and confirm your eligibility. Once payments begin, this benefit continues until you reach one of three milestones. Either you return to work, receive the maximum allowable benefit amount, or reach the maximum number of weeks you’re legally allowed to receive TTD payments.
- Permanent Partial Disability (PPD) — Severely hurt and unable to do your old job due to a permanent impairment? Then you may qualify for PPD benefits. This is a more complicated process, and several factors determine these awards, like the severity of your accident and injury. For PPD benefits, insurers assign a number of weeks to your unique injury and multiply that by your eligible wages to determine your amount. This payout typically occurs only after you reach maximum medical improvement.
- Permanent Total Disability (PTD) — If a permanent impairment stops you from ever working again, you may qualify for PTD benefits. Some states cap this benefit, while others reduce PTD payments once you qualify for Social Security disability (SSD) benefits.
What Is the Timeline to File and Receive Workers’ Compensation for Lost Wages?
Each state’s workers’ compensation laws list different timelines and requirements for filing, notification of claim approval or denial, and payment. The lone exception is if you are a federal worker. In that case, you should know there’s a 7-day waiting period before you can qualify for lost wages. If your recovery period lasts more than 14 days, your employer pays you lost wages for that initial week off.
California stipulates your employer must, within a day of receiving your claim, authorize medical treatment (under industrial guidelines and with a maximum of $10,000) while they investigate.
But lost wages are another matter. California law says your employer must respond within 14 days after learning of your injury. If the insurance company delays your claim, an investigation can take up to 90 days. During that time, the only workers’ compensation benefits insurers must typically pay are for medical treatment, not lost wages. You can, however, apply for state disability payments during this 90-day investigation period. This is a separate process.
When Should I Talk to An Attorney About Lost Wages?
An attorney can help you better understand your state’s requirements and claim timelines to receive benefits. Be sure to ask about other options to cover lost wages after your workplace accident during your free case consultation. If you’re wrongly denied benefits or suspect other workplace rights violations, then you may have grounds to sue your employer.
Ready to see if you may qualify? Complete your free online workers’ compensation case evaluation now!
Lisa Allen is a writer and editor who lives in suburban Kansas City. She holds MFAs in Creative Nonfiction and Poetry, both from the Solstice Low-Residency Program in Creative Writing at Pine Manor College. Prior to becoming a writer, Lisa worked as a paralegal, where she specialized in real estate in and around Chicago.