A Guide to Reduced Earnings and Workers Compensation

If I return to work after my work injury, am I entitled to workers’ compensation benefits?

Yes, if you return to work at your pre-injury wages, you will still receive medical benefits through the workers’ compensation insurance carrier.  This means doctor visits/follow up appointments, physical therapy, diagnostic testing, and more.  It is possible that a hearing may have to be requested and depositions taken to determine if a specific treatment is necessary, but if granted workers’ compensation insurance carrier will cover the treatment.  

If, however, an injured worker returns to work either at the same employer or different employer for a lower salary than established average weekly wage (AWW) due to injury/disability, the injured worker may be entitled to wage loss benefits in addition to medical benefits. This is referred to as reduced earnings.  The AWW is set by a workers’ compensation law judge and it is determined based on you weekly salary at the time of the accident.  Most times it is set per payroll that is supplied by an employer.  Reduced earnings cover up to 2/3 the difference between a pre-injury salary and post-injury salary (AWW- current weekly pay) X 2/3.  This allows the injured part to collect his or her pay as well as additional pay from insurance carrier.  The reduced earning pay is also determined by a workers’ compensation law judge.  

For instance, Jane got injured on the job.  Jane’s employer produces a payroll that shows Jane’s AWW at time of the injury is $1,000.  Jane’s doctor says she can return to work, but not at the same capacity as before injury, and finds Jane to be 50% disabled.  Since Jane can no longer handle her job duties, she finds a new job where she only earns only $500 per week.  Since Jane is now earning less money due to her disability, she is entitled to reduced earnings. 

 (AWW- currently weekly pay) X 2/3   ????  (1,000-500) X 2/3 =$333.33

This means that the injured worker will receive new pay of $500 plus an additional $333.33 from the workers’ compensation insurance carrier. 

Reduced earnings are considered a wage loss benefit and if an injured worker is working at a lesser weekly wage, he or she will qualify for reduced earnings. 

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