NO NONSENSE

Per today’s DWC Newsline, the maximum and minimum rates for total temporary disability in 2022 will remain unchanged from 2021 rates. This also means the rates for death benefits, life pension, and permanent total disability won’t be changing either.

Since these benefit rate changes are derived from the year over year increases in California’s state average weekly wage, it’s little wonder the state average weekly wage went down, instead of up for the first time in many years. Astute readers might wonder why the temporary disability and associated benefit rates aren’t going down next year – since the state average weekly wage did. The way these statutes were drafted, only the yearly increases in state average weekly wage are used for adjusting the benefit rates.

Don’t tell Lexis, but this is going to make my work updating the charts for the Labor Code book slightly easier.

Photo courtesy of Paul Sableman

Where did this SAWW come from anyhow?
Where did this SAWW come from anyhow?

Even with the recent Baker v. WCAB decision settling when the increase in state average weekly wage (SAWW) is applied, litigation continues over the precise future SAWW percentage to use in a commutation of life pension benefits. The DEU is currently using an assumed annual SAWW increase of 4.6% “based on a 50 year average.” 1

Before we consider how the DEU calculates future SAWW increases, it is necessary to look back to past SAWW changes.  In the last 50 years there have been only two instances where the SAWW has decreased from the prior year.  Since Labor Code Sections 4659(c) and 4453(a)(10) only apply increases in the SAWW to life pensions and permanent total disability benefits, there is no effect on the benefit rates for those two years.

When the DEU indicates a historical 50-year average of SAWW increases, they mean exactly that.  Thus, instead of averaging the decreases in the SAWW with the increases, the DEU averages only the increases of the historical SAWW data.  (I’ll save you the trouble of looking it up – 2004 and 2011 are the only instances in the last 50 years of any reduction in the state average weekly wage).  An average of just the SAWW increases over the last 50 years does come to 4.6%.

If you’re interested in verifying this information for yourself, I’ve prepared a list of the data used by the DEU in computing the 50-year average of SAWW increases.

  1. Andrea Marutti via Compfight []

A new kind of COLA
A new kind of COLA

I’m getting ready to launch a new workers’ compensation calculator and I could use your help. 1 I still need a few volunteers to help me test a permanent disability, life pension, and total permanent disability COLA commutation calculator.  Right now I need a few applicant attorneys, defense attorneys, and claims examiners.

Here’s what you need:

  • Any free or paid PDRater account
  • A familiarity with DEU COLA commutations
  • A familiarity with recent Baker decision
  • A willingness to answer a few questions

If this sounds like something you would be interested in helping with, please send me an e-mail!

 

  1. Photo Credit: Davide Reppucci via Compfight []

Double dip done right
Double dip done right

Some commentators have suggested that the recent Duncan v. WCAB (X.S.) case creates a “double dip” for injured workers entitled to permanent total disability benefits. 1  While I would take issue with much of that commentary, I would agree that permanent total disability benefits are affected by changes in the state average weekly wage twice under Duncan v. WCAB (X.S.).  Of the four benefits in California workers’ compensation system that are affected by changes in the SAWW, only permanent total disability benefits are affected twice.

It took the patient guidance of a very smart friend to help me to understand how this works:

  • When determining the proper starting rate for a permanent total disability case, you must first turn to Cal. Labor Code § 4453(a)(10).  This statute dictates that the limits (as in the statutory minimum and statutory maximum limits) are to be increased by the increase in the state average weekly wage (or SAWW).
  • However, according to Cal. Labor Code § 4659(c) as interpreted by Duncan v. WCAB (X.S.), the benefit rates themselves are then increased by the increase in the state average weekly wage (or SAWW).

Is it “double dipping” to have both the upper/lower limits and benefit rates increased by the SAWW?

Perhaps, but that’s what the two statutes say and what the Court of Appeals has decided.

  1. Photo courtey of alex012 []

Getting a handle on the SAWW
Getting a handle on the SAWW

Four benefits in California workers’ compensation are affected by changes in the state average weekly wage (or SAWW).1

  1. Temporary total disability benefits
    • The maximum and minimum benefit rates can be affected by the SAWW.
    • “Commencing on January 1, 2007, and each January 1 thereafter, the limits specified in this paragraph shall be increased by an amount equal to the percentage increase in the state average weekly wage as compared to the prior year.”  Cal. Labor Code § 4453(a)(10).
  2. Life pension benefits
    • The statutory life pension rates are now increased by the SAWW as directed by the recent Duncan v. WCAB (X.S.) case.
    • “For injuries occurring on or after January 1, 2003, an employee who becomes entitled to receive a life pension or total permanent disability indemnity as set forth in subdivisions (a) and (b) shall have that payment increased annually commencing on January 1, 2004, and each January 1 thereafter, by an amount equal to the percentage increase in the “state average weekly wage” as compared to the prior year.”  Cal. Labor Code § 4659(c).
  3. Permanent total disability benefits
    • First, the minimum and maximum limits for permanent total disability benefits are increased, then the benefit rates themselves are increased.
    • “Commencing on January 1, 2007, and each January 1 thereafter, the limits specified in this paragraph shall be increased by an amount equal to the percentage increase in the state average weekly wage as compared to the prior year.”  Cal. Labor Code § 4453(a)(10).
    • “For injuries occurring on or after January 1, 2003, an employee who becomes entitled to receive a life pension or total permanent disability indemnity as set forth in subdivisions (a) and (b) shall have that payment increased annually commencing on January 1, 2004, and each January 1 thereafter, by an amount equal to the percentage increase in the “state average weekly wage” as compared to the prior year.”  Cal. Labor Code § 4659(c).
  4. Death benefits
    • “A death benefit in all cases shall be paid in installments in the same manner and amounts as temporary total disability indemnity would have to be made to the employee, unless the appeals board otherwise orders.” Cal. Labor Code § 4702(b).

Did I just describe two increases to the permanent total disability benefit rate?  Huh, so I did.

Tune in tomorrow for more on Duncan v. WCAB, COLA’s, and SAWW increases!

  1. Photo courtesy of Sean Venn []