Weekly payments of compensation for total disability cannot be reduced except in cases involving retirement. Compensation for partial disability may be reduced based on the following circumstances:
Return to Work
If an injured worker earns wages while receiving benefits for partial disability, he/she will receive compensation payments equal to 75% of the difference between his/her spendable base wage before the injury and the spendable base wage after the injury. In other words, an injured worker is still entitled to weekly compensation, based on this formula, if he/she returns to work at a job that pays less than the average weekly wage earned at the job where the injury occurred. Weekly benefits are calculated each week based on the amount of wages earned each week in the new job and converted into a spendable base wage.
An injured worker has a duty to report all wages earned while receiving workers’ compensation benefits to the insurance company so the proper amount of compensation owed may be determined. The failure to report earnings may result in the suspension and forfeiture of benefits. On occasion, an insurance company may send an injured worker a form called “Report of Earnings” which requires the injured worker to report any and all wages earned while receiving workers’ compensation. Regardless of whether this form is sent to an injured worker, the law imposes a duty to report wages to the insurance company. Obtaining or attempting to obtain workers’ compensation benefits through fraudulent means is a crime.
Maximum Medical Improvement
Maximum medical improvement (MMI) is defined as a point in time when an injury has become stable and no further treatment is reasonably expected to materially improve the condition. In other words, it is that point when a doctor says that nothing more can be done to improve the condition. Under such circumstances, weekly compensation benefits may be reduced by 30 percent upon order of the Workers’ Compensation Court. The reduction does not apply to injured workers who are working. Also, an injured worker may receive a delay in the implementation of the reduction by proving that, despite having reached MMI, he/she has made a good faith effort at looking for work.
Suitable Alternative Employment
Suitable alternative employment (SAE) is an employer’s offer of a job to an injured worker which the worker is physically able to perform, bears a reasonable relationship to his/her qualifications, background, education and training, and does not result in the loss of seniority or other employment benefits. If the job is accepted, weekly compensation will be paid equal to two-thirds of the difference between his/her average weekly wage and the gross wages earned in the SAE job. If the injured worker refuses an offer of SAE, then the Court can reduce weekly compensation benefits to the amount which would have been payable if the job had been accepted, i.e., two-thirds of the difference between the employee’s average weekly wage and the gross weekly earnings the employee would have received if he/she had accepted the offer of suitable alternative employment.
An offer of suitable alternative employment has to meet certain technical requirements of the law. In order to be considered an offer of suitable alternative employment, the employer must comply with those technical requirements in its written offer; otherwise, the offer will be considered invalid and weekly benefits will not be reduced for an injured worker who refuses the offer.
If an injured worker returns to suitable alternative employment and is later laid off or terminated for any reason other than his/her misconduct, then full weekly compensation benefits will resume automatically. This protection is not provided to an injured worker who returns to a light duty job which is not classified as suitable alternative employment. In this way, a return to suitable alternative employment provides a form of job security to an injured worker. A return to work at light duty is not the same as a return to work at suitable alternative employment. A light duty job is only considered suitable alternative employment if it is documented in writing and notice of the return to suitable alternative employment is filed with the Department of Labor.