In return for not having to show that the employee is without fault in an accident, the employee gives up his or her right to full lost wage (indemnity) benefits. Instead, the employee is entitled to a sum which partially compensates the employee for loss of earning capacity.
Louisiana law provides for several types of disability, including total disability and a disability which is less than total.
Total disability is defined as the inability “to engage in any self-employment or occupation for wages.”
Disability which is less than total is defined as the inability “to earn wages equal to ninety percent or more of wages at time of injury,” a standard which measures disability entirely in economic terms rather than physical terms.
Compensation for total disability is fixed in all cases at 66 2/3% of the wage earned by the injured employee under the contract of employment in effect at the time of the accident.
If the worker is not totally disabled, but rather entitled to what are called supplemental earnings benefits (SEB), these payments are for two thirds of the difference between the pre-injury monthly wages and those monthly wages the worker is able to earn after the injury.
Disability is also divided into the categories of temporary and permanent. In either case, 66 2/3% of wages is payable during the period of total disability.
Indemnity (Lost Wage) Benefits in Louisiana Workers Compensation
Indemnity benefits are the lost wages that an injured employee is entitled to recover, due to an inability to work, when the employee is unable to return to his or her job because of a work-related injury or illness.
However, a injured employee will not receive the full amount of his or her lost wages, but instead only 2/3 of the average weekly wage in the four weeks prior to the accident.
This is a common misconception among injured employees - that they will get 100% of their lost wages under Louisiana workers compensation. Again, unfortunately, the law in Louisiana is instead that the employee will not receive their entire lost wages, but only two-thirds of the wages you earned in the four weeks before your accident.
Additionally, the amount of the indemnity benefits are capped (or limited) by Louisiana law.
So if an employee earns a significant amount, that amount will likely be limited to a certain maximum amount. The amount of the limit changes every year, but for example, in 2019, an injured employee could receive at most $665.00 per week in indemnity benefits.
Last, the employee's first indemnity payment is due two weeks after the employer first receives notice of the injury. And the lost wages from the first week after the injury are not owed by the employer unless the employee is disabled for at least six weeks; at this six week mark, the insurer should then pay this first week of indemnity benefits.
Types of Indemnity Benefits in Louisiana Workers Compensation
Louisiana workers compensation provides four categories of income benefits for people who have suffered a work-related injury or illness. The four types of indemnity benefits are:
- TTD: Temporary Total Disability Benefits
- PTD: Permanent Total Disability Benefits
- SEB: Supplemental Earnings Benefits
- PPD: Permanent Partial Disability Benefits
Under Louisiana workers compensation, an injured employee can only receive one type of income benefit at a time. However, an injured employee may qualify for different types of income benefits at different points during the workers compensation process.
Indemnity Qualifications and Amounts
Under Temporary Total Disability Benefits, an injured employee, who is unable to work due to a temporary medical condition, will receive 2/3 of his or her average weekly wage until his or her treating physician says that the employee can work again in some capacity.
Under Permanent Total Disability Benefits, an injured employee, who is unable to work due to an injury that is so severe and debilitating that it prevents the employee from ever working again, will receive 2/3 of his or her pre-injury weekly wage indefinitely, or possibly a lump-sum payout. Often, the employee will also qualify for Social Security Disability Insurance.
Under Supplemental Earnings Benefits, an injured employee, who is unable to return to work and earn 90% percent of his or her average weekly wage prior to the injury, will be paid 2/3 of the difference between what the employee was earning before the accident (Average Weekly Wage) and what the employee is able to earn after the doctor releases the employee with restrictions (unless an employer offers a job within the doctor's restrictions at 90% or more of the employee's pre-injury wages), for a maximum of 10 years.
Under Permanent Partial Disability, an injured employee, who has lost the use of a body part or has suffered an amputation of a body part but is still able to perform some work tasks, will most likely be awarded 2/3 of the average weekly wage prior to injury, contingent on the percentage of determined disability.
How Long Can Indemnity Benefits Last in Louisiana Workers Compensation?
How long indemnity benefits can typically last is based on the type of benefits received. Though the calculations and exceptions can be complicated, the short answer is that, for most employees, their indemnity benefits will be limited to ten years.
At the onset of a workers' compensation claim, the most common type of indemnity benefits paid is temporary total disability indemnity benefits. These benefits are paid only while the worker remains totally disabled from his pre-injury job because of his or her work injury or illness.
Eventually, when the worker's injuries or illness permits, his or her treating physician will release the employee to work. When the release is not to full duty work, then the worker who cannot return to work and earn at least ninety percent of his pre-injury wage, is due 2/3 of the difference, which is deemed supplemental earnings benefits (SEBs).
There is no limit on the number of weeks of temporary total disability benefits (TTD) that can be paid. But, for supplemental earnings benefits, 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. However, there is a credit given the employer for each week of temporary total disability 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.
How to Determine the Average Weekly Wage in Louisiana Workers Compensation
An employee's "average weekly wage" is critical in determining the amount of workers compensation indemnity benefits that the employee should receive.
Typically, an employee's average weekly wage equals the employee's "gross wages" during the "four full weeks before the accident."
So if during the last four full weeks of employment, the employee worked an average of 45 hours per week, and the employee's wage rate was $20 per hour, then this employee's average weekly wage would be $900.00.
However, the average weekly wage is not the amount of the injured worker's weekly indemnity benefit; instead the weekly indemnity benefit amount is 2/3 of the average weekly wage. So in this basic example, the injured worker's weekly indemnity benefit would be $600.00 per week (which is 2/3 of $900.00).
But there are many exceptions and variations to this basic calculation. To properly determine an employee's average weekly wage, close attention must be paid to the terms "gross wages" and "four full weeks before your accident."
Gross wages are defined as the total amount of an employee earnings before deductions - such as deductions for taxes, social security, health insurance, or retirement plans - are taken from the paycheck. If an injured worker is a salaried employee, the gross wages are the amount of his or her annual salary. If an injured worker is a hourly employee, the gross wages are the number of hours worked by the hourly wages.
Under Louisiana workers compensation, gross wages may also include taxable fringe benefits, such as the payment of some business expenses or amounts taken out of an employee's income and deposited into a pre-tax retirement account such as a 401(K).
A good rule of thumb is that, if an employee is required to pay income tax on something, then likely it should be counted as gross wages for purposes of determining a Louisiana workers compensation average weekly wage.
Four Full Weeks Before the Accident
As noted above, an injured employee's average weekly wage is typically based upon the employee's gross income in the four full weeks before his or her accident. However, an incorrect calculation often results in a much lower weekly benefit, so it is critical to calculate the average weekly wage correctly, based on the rules and laws of Louisiana workers compensation.
For the purposes of calculating the average weekly wage, the week in which the accident happened should not be included in the calculations, since in most cases, that week is usually not a full week of work due to the injury.
If the injured worker has an occupation disease (or work-related illness), instead of an injury that occurred at a specific time and place, then the employee's "accident date" for the purposes of calculating the average weekly wage is considered to be either the last day worked for the employer, or the last date upon which the employee had a harmful exposure to the work-related condition that cased the disease or illness - whichever is later.
If the injured worker was a full-time employee who typically worked at least 40 hours per week, then the employee will usually be credited with a full 40 hours of income for any week in which the employee worked less than 40 hours due to vacation, holidays, or an employer-reduced work schedule.
If an injured worker was working more than one job at the time of the injury, the insurance company must calculate the average weekly wage based on all the jobs which the employee was working around the time of the accident. In short, if the employee's injury causes lost income from multiple jobs, then the employee is entitled all the lost income from any job which income was lost.
Louisiana Workers Compensation Death Benefits
If an employee is fatally injured or passes away as the result of an injury or illness they suffered on the job, the deceased employee's family may be entitled to claim death benefits - including lost wages - within two years of the deceased's last treatment related to the injury.
Typically, the surviving spouse and dependent children of a deceased employee will be able to receive weekly indemnity benefits. But if there are no surviving children or spouse, a one-time death benefit of $75,000 will likely be paid to the deceased employee's parents.
Additionally, the deceased employee's family may be entitled to claim assistance for burial expenses up to $8,500.