Wage Replacement: Are My Workers’ Compensation Benefits Forever?

Managing Member Alan G. Brackett and Associate Ava M. Wolf are co-authors of an “Attorney Analysis” workers’ compensation column for Reuters Legal News and Westlaw Today. Their recent article, “Wage replacement: Are my workers’ compensation benefits forever?,” was published on June 25, 2024.

Wage replacement: Are my workers’ compensation benefits forever?

Fortunately, most workplace injuries are minor and do not result in serious injury or lasting disability. When a worker is seriously injured at work, they’re unable to work in some capacity for a certain period of time, indefinitely, or even permanently. This entitles that worker to wage replacement or “indemnity” benefits. Indemnity benefits are not always infinite. The type of injury, status of medical treatment, and jurisdiction determine how long an injured worker will receive indemnity benefits.

Understanding the Types of Indemnity Benefits

Indemnity benefits are classified as either temporary or permanent and either total or partial, and in most jurisdictions, provide the injured worker with a percentage of their average weekly wage. Temporary benefits are awarded when an injured worker is temporarily unable to work, and permanent indemnity benefits are awarded when the injured worker has reached maximum medical improvement and is able to return to work or suitable alternative employment has been identified. Whether indemnity benefits are total or partial in nature depends on whether the injured worker is totally or partially disabled, i.e., whether the injured worker has lost some or all use of a body part (amputation of an arm or leg, loss of eyesight, loss of hearing, etc.), or whether the injured worker can work in some capacity.

Capping Injured Workers’ Indemnity Benefits at the State Level

Each state has placed limitations on how long an injured worker can receive indemnity benefits, whether temporary or permanent. Some states have also created limitations for “scheduled injuries,” which are usually injuries involving the loss of a limb, eye (vision), digits, or ear (hearing). For example…