Pam: Barry, you told us there are three basic benefits in a workers’ compensation case. The first two are the disability payments you get while you’re off work and payment of your medical expenses. The last benefit you told us about was the settlement for permanency associated with the injury. How does that work?
Barry: The last benefit you get is called permanent partial disability and this is the settlement that you get at the end of the case and it relates to the amount of permanency that’s associated with the injury. When you hear people talk about a workers comp settlement this is what they’re really talking about. How it works is this. The workers comp act assigns a certain amount of weeks pay to every part of your body. Depending on the amount of loss you have of that particular part of your body, you get that many weeks pay.
For example, just to make up numbers, if your arm was worth a 100 weeks pay and it was lopped off at the shoulder, you would get a 100 weeks pay. Now, if you lose a 20% of the use of your arm you get 20 weeks pay. Now that’s paid to you at the permanency rate and the permanency rate is 60% of your average weekly wage. Take the case where you lost 20% of the use of your arm. You would get 20 weeks pay, that’s 20% of the 100 weeks pay that the arm was worth. At the permanency rate which is 60% of your average weekly wage, so you get 60% of 20 weeks pay. What that amounts is 12 weeks at your average weekly wage. Which goes back to this whole issue of the average weekly wage is a really key calculation in what you get in the way of benefits and workers compensation case.
One of the sort of bizarre features that results from this is if you and I have the exact same injury, but I make twice as much money as you, I should in theory get double the settlement you get for the exact same injury, which always strikes people as being strange, because one of the things that people who have been hurt on the job talk about is what do they get from this. One of the key variables in this is what your average weekly wage is.
Pam: When is the appropriate time for a worker that’s been hurt on the job to settle a worker’s comp case?
Barry: Well, it’s really gonna be after they’ve returned to work and they feel like they can actually go about doing the job as they did once before. At that point you should have some degree of confidence that you’re done with medical care, that you’re kind of where you’re gonna be and that things are stable. At that point it really becomes an appropriate window to looking and thinking about settling the case.
Now, one of the interesting things about the settlement portion of the case is that the insurance company isn’t required to initiate settlement negotiations, they’re not required to put forth an offer to you. I can’t tell you the number of times that I’ve been contacted over the years by people who have had fairly decent experiences after an on the job injury. They got paid what they should while they were off, they got their medical care, they went back to work and they’re waiting for the insurance company to talk to them about settling the case, and they haven’t heard anything but crickets for six months or a year or more. What the insurance company is really waiting to have happen is for the statute of limitations to run out and at that point there’s no obligation for them to ever pay you anything in the way of a permanency settlement.
Barry: So from the perspective of the insurance company, silence is golden. Waiting like that can literally cost somebody tens of thousands of dollars.