What Are Supplemental Earnings Benefits in Louisiana Workers Compensation?
Supplemental earnings benefits (SEBs) are an extremely common type of indemnity (lost wage) benefit in Louisiana workers compensation.
Supplemental earnings benefits (SEBs) are lost wage benefits for when the injured employee is able to perform some work, but is unable to perform enough work to earn at least 90 percent of the income that the employee was receiving prior to his or her accident.
The purpose of supplemental earnings benefits (SEBs) is to compensate the injured employee for wage earning capacity lost as result of a work-related accident.
In other words, the purpose of SEBs is to supplement an injured employee's income.
But Louisiana workers compensation is not a wage-insurance plan. Rather, it is a program intended to insure a basic minimum income to employees who are unable to earn their prior wage to work-related injuries.
Thus, an injured worker will never receive his full wages under Louisiana workers compensation, and will always be limited as to what he or she receive in lost wage benefits.
Specifically, under supplemental earnings benefits (SEBs), the injured employee will receive two-thirds (66 2/3%) of the difference in the average weekly wage of what the employee was making before his or her accident and what the employee presently is earning or capable of earning.
However, the amount is subject to a specific maximum set under Louisiana law, depending on the year of the injury, but not a minimum.
Also, it is usually in dispute as to what type of wages an injured employee is "capable" of earning. These possible earnings can include wages from a different occupation, though that occupation must be in line with the injured worker's education, training, and experience.
Nevertheless, supplemental earnings benefits (SEBs) essentially help the injured employee by bringing up the employee's level of wages, if the employee is not earning as much as two-thirds (66 2/3%) of the employee's prior wages due to the injury.
Supplemental earnings benefits can last for as long as 520 weeks (or 10 years), but can be terminated for a number of reasons before that point.
Also, these 520 weeks include weeks in which the employee was already paid Temporary Total Disability (TTD) benefits.
To receive these supplemental earnings benefits, the injured worker must submit on a monthly basis a Louisiana Department of Labor Form 1020 to the workers compensation insurer, to verify what, if any, income the injured worker earned during that month.
Oftentimes, an ongoing obligation of the workers compensation insurer to pay supplemental earnings benefits gets resolved through a lump sum settlement with the employee, though the workers compensation judge must first approve of any settlement.
The Typical Process of Obtaining Supplemental Earnings Benefits in Louisiana Workers Compensation
At the onset of a workers compensation claim, the most common type of indemnity benefit paid is temporary total disability indemnity benefits. These benefits are paid only while the worker remains totally disabled from his or her pre-injury job because of his or her work injury or illness.
Eventually, the typical injured worker at some point either recovers from a job injury or reaches a point of "maximum medical improvement" (which is when the employee gets as recovered or healthy as he or she is going to get).
Then, when the injured worker's injuries or illnesses permit, the treating physician will release the employee to work.
This release and return to employment will be either with restrictions or without restrictions:
- If the injured worker is released by the treating physician to return to work without any physical work restrictions, then the employee's weekly lost wage (indemnity) benefits will end.
- But if the injured worker is released by the treating physician to return to work with physical work restrictions, and can prove a wage loss because of those restrictions, then the employee is entitled to supplemental earnings benefits (SEBs).
For supplemental earnings benefits (SEBs), the injured employee who cannot return to work and earn at least ninety percent of his pre-injury wage, will then receive 2/3 of the difference of what the employee was previously earning.
So, generally speaking, an injured employee will become entitled to supplemental earnings benefits (SEBs) on or after the date on which the employee's treating physician releases the employee to light duty or sedentary work.
If the doctor releases the employee to return to work with restrictions, and then the employee's TTD benefits are converted to supplemental earnings benefits.
So if an employee is released by his or her doctor to return to some type of work, but the employer cannot accommodate that type of work, then the workers compensation insurance company can reduce the lost wage benefits by the amount of wages that the injured employe is "capable" of earning.
To do this, the workers compensation insurance company will hire a "vocational rehabilitation counselor" to produce a "labor market survey" in order to find out how much the employee is capable of earning, and then reduce payments by that amount.
A labor market survey is simply a list of available jobs within close proximity that the employee could possibly perform, given the employee's education, skill set, work experience and medical limitations.
This labor market survey will be presented to the employee's treating physician, and if this doctor agrees that the employee could perform these jobs, then the workers compensation insurance company will reduce the employee's lost wage benefits by the amount of wages that the job pays.
So the treating physician's opinion and approval are extremely important, and the employee should make sure that the physician fully understands the employee's capabilities and to what the physician is agreeing.
Actual Job Placement is Not Required for Reduction of Lost Wage Benefits - Only The Availability of a Suitable Job
So in order to reduce the lost wage benefits of an injured employee, the workers compensation insurance company only needs to show (through a labor market survey) availability of a suitable job for the employee.
Actual job placement is not necessary. It does not matter whether the injured employee is offered the job or accepts the job or begins to work that job.
The workers compensation insurance company will reduce the lost wage benefits once it can show that the jobs are available and that the treating physician signed off.
The employee does not even to be part of the process - though he or she absolutely should be as involved as possible in the process.
Specifically, Louisiana courts have found that the following is necessary for an employer to establish “availability” of suitable employment once a worker had shown that he could not earn 90% of his pre-injury wage:
- The existence of a suitable job within claimant's physical capabilities and within claimant's or the employer's community or geographic region;
- The amount of wages that an employee with claimant's experience and training can be expected to earn in that job; and
- An actual position available for that particular job at the time that the claimant received notification of the job's existence.
Also, Louisiana courts have defined a “suitable job” as a job that the employee can physically perform as well as one that “falls within the limits of claimant's age, experience and education, unless, of course, the employer or potential employer is willing to provide any additional necessary training or education.”
So again, actual job placement, or even an offer of employment, is not necessary to prove the availability of employment that would reduce the lost wage benefits of an injured employee.
The workers compensation insurance company simply needs to show general availability of employment physically suitable to the injured employee within a reasonably close geographic area.
However, the injured employee may rebut the insurance company's "proof" of availability of jobs by showing that economic and other conditions disprove such availability.
Such rebuttal can be done in numerous ways, including contacting the potential employers of such supposedly available jobs and showing the lack of job offering or the lack of jobs available that the injured employee would be able to perform.
Calculating the Amount of Supplemental Earnings Benefits Due Under Louisiana Workers Compensation
Once it has been determined that injured employee is entitled to supplemental earnings benefits (SEBs) in workers compensation, the amount of these benefits must be calculated.
The amount of an award of supplemental earnings benefits (SEBs) in a workers compensation proceeding is based upon the difference between the claimant's pre-injury average monthly wage and the claimant's proven post-injury monthly earning capacity.
Under supplemental earnings benefits (SEBs), the injured employee will receive two-thirds (66 2/3%) of the difference in the average weekly wage of what the employee was making before his or her accident and what the employee presently is earning or capable of earning.
However, the amount is subject to a specific maximum set under Louisiana law, depending on the year of the injury.
The statutory minimum does not apply to supplemental earnings benefits, so the rate will not not increased even if it is below the minimum compensation rate.
In other words, the calculation for determining the amount of supplemental earnings benefits due is:
- (Average Weekly Wage – Post-Accident Wage Earning Capability) x 2/3 = Weekly Supplemental Earnings Benefits Amount
- If this Weekly Supplemental Earnings Benefits Amount is above the legal limit, then the employee only receives the limit.
So for example, if an employee was on average earning $1,200.00 per week before the accident, and then returned to work, but because of work restrictions could only earn $600.00 per week, then the employee would receive $400 per week in supplemental earnings benefits. ($1,200 - $600 = $600; 2/3 times $600 = $400).
Also, typically supplemental earnings benefits are paid by the month. To determine the monthly amount, simply multiple the weekly rate by 52 (weeks per year), and then divide by 12 (months per year). So, for the above example, the monthly supplemental earnings benefits rate would be $1,733.33. ($400 times 52 = $20,800; $20,800 divided by 12 equals $1,733.33).
Of course, it is not fair that this employee was making $1,200 per week before the accident, but after the accident only receives a total of $800 per week.
But Louisiana workers compensation was not designed as a wage-insurance plan, but rather as a program intended to insure a basic minimum income to employees who are unable to earn their prior wage to work-related injuries. That is the reason for the 1/3 reduction in wage loss and the maximum limits placed upon these indemnity benefits.
How Long (Duration) Can Supplemental Earnings Benefits Last in Louisiana Workers Compensation?
For supplemental earnings benefits (SEBs), the injured worker can only be paid for a maximum total of 520 weeks (or 10 years) where the employee remains disabled because of work injury.
So the employee can receive up to 520 weeks of supplemental earnings benefits (SEBs).
But if in any given week the employee is able to earn 90% or more of his or her pre-injury wage, then no indemnity benefits will be paid at all for that week.
But of course, the employer or carrier receives no credit for that week toward the maximum of 520 weeks.
And for any week in which indemnity benefits are payable (where the employee earns less than 90% of his or her pre-injury wage), the employer or insurer receives credit toward the maximum 520-week period.
Thus, the actual number of weeks that a claim might be in existence could extend well beyond 520 calendar weeks, though the actual number of weeks of payments should not exceed that figure.
Also, supplemental earnings benefits (SEBs) will terminate:
- At the end of any two-year period following the end of TTD, unless during that two-year period, SEB payments have been payable during at least thirteen consecutive weeks; or
- When the employee retires, but subject to a minimum of 104 weeks of SEB.
Otherwise, supplemental earnings benefits (SEBs) continue until the wage loss ends or until after 520 weeks, whichever comes first.
But again, the total obligation to pay 520 weeks of supplemental earnings benefits (SEBs) is subject to a credit for the number of weeks of Temporary Total Disability (TTD) benefits or other benefits paid.
Credit of Temporary Total Disability Benefits on the 520 Week Limit of Supplemental Earnings Benefits in Louisiana Workers Compensation
Again, for supplemental earnings benefits (SEBs), the injured worker can only be paid for a total of 520 weeks (or 10 years) where the employee remains disabled because of work injury.
But, when calculating this 520 week limit, the employer and its workers compensation insurer will receive a credit for the number of weeks of Temporary Total Disability (TTD) benefits paid.
Therefore, if an employee receives six years of temporary total disability (TTD) benefits, and then switches over to supplemental earnings benefits (SEBs), then the employee would be limited to only 4 years of supplemental earnings benefits (SEBs), not 10 years.
This is a week-for-week credit off of those 520 weeks for any week in which the employee already received any amount of any other type of income benefits (but usually Temporary Total Disability (TTD)) benefits.
Again, for example, if the employee received Temporary Total Disability (TTD) benefits for 100 weeks, but then was released to light duty and becomes eligible to receive supplemental earnings benefits (SEBs), then the maximum number of weeks which the employee could receive supplemental earnings benefits would be 420 weeks - not 520 weeks.
The Effect of Termination, Retirement, Transfer or Refusal on Supplemental Earnings Benefits in Louisiana Workers Compensation
Termination from Employment
In Louisiana workers compensation, termination of employment does not affect an injured worker's entitlement to supplemental earning benefits.
The Burden of Proof in Obtaining Supplemental Earnings Benefits in Louisiana Workers Compensation
Benefits for supplemental earnings benefits are awarded only if the injured worker proves by a "preponderance of the evidence" that he or she, as result of a job injury, he is unable to earn 90% of pre-accident wage.
Preponderance of the evidence simply means "more likely than not."
The Initial Burden of Proof on the Employee
So, initially, the employee seeking supplemental earnings benefits in a workers' compensation proceeding bears the burden of proving, by a preponderance of the evidence, that the injury resulted in his or her inability to earn 90% or more of his average pre-injury wage under the facts and circumstances of the individual case.
In other words, an injured employee must prove by "preponderance of the evidence" that he or she is entitled to supplemental earnings benefits. And the employee does not receive any presumption of disability.
However, it should nevertheless be noted that all Louisiana workers compensation cases are to be "liberally construed in favor of the claimant."
This simply means that the benefit of the doubt should always be given to the injured worker, and not the employer or insurance company.
The workers compensation judge must take into account all factors which might bear on an employee's ability to earn a wage in determining whether the injured employee has met her burden of showing an inability to earn ninety percent of her pre-injury wages, so as to entitle the employee to supplemental earning benefits (SEBs), including factors such as the employee's medical condition, efforts at obtaining employment post-injury, and actual work history after the accident.
But also, once the worker proves a wage loss, the employer has the burden of proving the worker's post-accident wage earning capacity.
The Burden of Proof Shifts to the Insurance Company
Specifically, if the employee meets the burden of showing that he or she sustained a work-related injury that resulted in an inability to earn 90% or more of the employee's average pre-injury wage, then the burden then shifts to the employer to prove that the employee is physically able to perform a certain job and that the job was offered to the employee, or that the job was available to the employee within her or the employer's geographic region.
But the Employee Can Still Refute Insurance Company's Claims
And then, if the employer satisfies that burden, then the employee must show, by clear and convincing evidence and unaided by any presumption of disability, that the employee is unable to perform the employment offered or available.
At any rate, when determining whether an employee has proven that he or she is unable to engage in any gainful occupation, the workers' compensation judge should accept as true a witness's un-contradicted testimony, even though the witness is a party, absent circumstances casting suspicion on the reliability of that testimony.
Pain in Supplemental Earnings Benefits in Louisiana Workers Compensation
Under Louisiana law, a worker's substantial pain is a factor in considering eligibility for supplemental earnings benefits (SEBs).
In other words, an injured worker's substantial pain is a factor in considering eligibility for supplemental earnings benefits (SEBs), unlike situations involving temporary total disability (TTD) benefits.
So a worker who continues to work, even though in pain, is not entitled to temporary total disability (TTD) benefits or permanent total disability (PTD) benefits, but is entitled to supplemental earnings benefits.
If an injured worker seeking supplemental earnings benefits, establishes by clear and convincing evidence, unaided by any presumption of disability, that solely as a consequence of substantial pain, he or she cannot perform employment offered, tendered or otherwise proven to be available to him or her, then the injured worker is deemed incapable of performing such employment.
And if the employer carries its burden of proving that a suitable job was offered to the employee or was available within the employee's or the employer's community or reasonable geographic region, then the employee seeking supplemental earnings benefits must show by clear and convincing evidence, unaided by any presumption of disability, that he or she was unable to perform the offered or available employment, solely as the result of substantial pain.
The Louisiana Statute for Supplemental Earnings Benefits in Louisiana Workers Compensation
The Louisiana lost wage statute is La. R.S. 23:1221. Concerning supplemental earnings benefits (SEBs), the statute reads as follows:
§1221. Temporary total disability; permanent total disability; supplemental earnings benefits; permanent partial disability; schedule of payments
Compensation shall be paid under this Chapter in accordance with the following schedule of payments:
(3) Supplemental earnings benefits.
(a)(i) For injury resulting in the employee's inability to earn wages equal to ninety percent or more of wages at time of injury, supplemental earnings benefits, payable monthly, equal to sixty-six and two-thirds percent of the difference between the average monthly wages at time of injury and average monthly wages earned or average monthly wages the employee is able to earn in any month thereafter in any employment or self-employment, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured and whether or not an occupation for which the employee at the time of the injury was particularly fitted by reason of education, training, and experience, such comparison to be made on a monthly basis. Average monthly wages shall be computed by multiplying his wages by fifty-two and then dividing the product by twelve.
(ii) When the employee is entitled to monthly supplemental earnings benefits pursuant to this Subsection, but is not receiving any income from employment or self-employment and the employer has not established earning capacity pursuant to R.S. 23:1226, payments of supplemental earning benefits shall be made in the manner provided for in R.S. 23:1201(A)(1).
(b) For purposes of Subparagraph (3)(a), of this Paragraph, the amount determined to be the wages the employee is able to earn in any month shall in no case be less than the sums actually received by the employee, including, but not limited to, earnings from odd-lot employment, sheltered employment, and employment while working in any pain.
(c)(i) Notwithstanding the provisions of Subparagraph (b) of this Paragraph, for purposes of Subparagraph (a) of this Paragraph, if the employee is not engaged in any employment or self-employment, as described in Subparagraph (b) of this Paragraph, or is earning wages less than the employee is able to earn, the amount determined to be the wages the employee is able to earn in any month shall in no case be less than the sum the employee would have earned in any employment or self-employment, as described in Subparagraph (b) of this Paragraph, which he was physically able to perform, and (1) which he was offered or tendered by the employer or any other employer, or (2) which is proven available to the employee in the employee's or employer's community or reasonable geographic region.
(ii) For purposes of Subsubparagraph (i) of this Subparagraph, if the employee establishes by clear and convincing evidence, unaided by any presumption of disability, that solely as a consequence of substantial pain, the employee cannot perform employment offered, tendered, or otherwise proven to be available to him, the employee shall be deemed incapable of performing such employment.
(d) The right to supplemental earnings benefits pursuant to this Paragraph shall in no event exceed a maximum of five hundred twenty weeks, but shall terminate:
(i) As of the end of any two-year period commencing after termination of temporary total disability, unless during such two-year period supplemental earnings benefits have been payable during at least thirteen consecutive weeks; or
(ii) After receipt of a maximum of five hundred twenty weeks of benefits, provided that for any week during which the employee is paid any compensation under this Paragraph, the employer shall be entitled to a reduction of one full week of compensation against the maximum number of weeks for which compensation is payable under this Paragraph; however, for any week during which the employee is paid no supplemental earnings benefits, the employer shall not be entitled to a reduction against the maximum number of weeks payable under this Paragraph; or
(iii) When the employee retires; however, the period during which supplemental earnings benefits may be payable shall not be less than one hundred four weeks.
(e)(i) The fact that an employee has suffered previous disability, impairment, or disease, or received compensation therefor, shall not preclude him from receiving benefits for a subsequent injury or preclude benefits for death resulting therefrom.
(ii) If an employee receiving supplemental earnings benefits suffers a subsequent injury causing the payment of temporary total disability, permanent total disability, or supplemental earnings benefits, the combined benefits payable shall not exceed the maximum compensation rate in effect for temporary total disability at the time of the subsequent injury. Any reduction in benefits due to such limit shall be applied first to the supplemental earnings benefits payable as a result of the prior injury.
(f) Any compensable supplemental earnings benefits loss shall be reported by the employee to the insurer or self-insured employer within thirty days after the termination of the week for which such loss is claimed. The assistant secretary shall provide by rule for the reporting of supplemental earnings benefits loss by the injured worker and for the reporting of supplemental earnings benefits and payment of supplemental earnings benefits by the employer or insurer to the office and may prescribe forms for such reporting. The office, upon request by the employer or insurer, shall provide verification through unemployment compensation records under the Louisiana Employment Security Law of any claimed supplemental earnings benefits loss and shall obtain such verification from other states, if applicable.
(g) When an injured employee has been released to return to work with or without restrictions, and the employer maintains an established written and promulgated substance abuse policy which requires employer-administered drug testing prior to employment or return to work, upon the employee's failure to meet the requirements of such employer's established policy and inability to qualify for the position for that reason, the obligation for all benefits pursuant to this Chapter, with the sole exception of the obligation to provide reasonable and necessary medical treatment, shall be terminated and the employee shall be subject to the terms and conditions established in the employer's promulgated drug testing policy and program. The provisions of this Subparagraph shall not apply to prescription medication prescribed for the employee in the dosages so prescribed by a physician.