Lost Wage (Indemnity) Benefits in Louisiana Workers Compensation

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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 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 (SEBs), then 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, an 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 before 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 earned in the four weeks before your accident.

Additionally, the amount of the indemnity benefits is 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 can 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 (TTD) indemnity benefits. These benefits are paid only while the worker remains totally disabled from his or her pre-injury job because of the 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 ten years) where the employee remains disabled because of a 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 four years of Supplemental Earnings Benefits (SEBs), not ten 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

Gross wages are defined as the total amount 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 an 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 caused 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 to all the lost income from any job in 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 spouses, 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.

The Louisiana Statute for Lost Wage (Indemnity) Disability Benefits in Louisiana Workers Compensation

The Louisiana lost wage statute is La. R.S. 23:1221. 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:

(1) Temporary total.

(a) For any injury producing temporary total disability of an employee to engage in any self-employment or occupation for wages, 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 injury was particularly fitted by reason of education, training, or experience, sixty-six and two-thirds percent of wages during the period of such disability.

(b) For purposes of Subparagraph (1)(a) of this Paragraph, compensation for temporary disability shall not be awarded if the employee is engaged in any employment or self-employment regardless of the nature or character of the employment or self-employment including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain.

(c) For purposes of Subparagraph (1)(a) of this Paragraph, whenever the employee is not engaged in any employment or self-employment as described in Subparagraph (1)(b) of this Paragraph, compensation for temporary total disability shall be awarded only if the employee proves by clear and convincing evidence, unaided by any presumption of disability, that the employee is physically unable to engage in any employment or self-employment, regardless of the nature or character of the employment or self-employment, including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain, notwithstanding the location or availability of any such employment or self-employment.

(d) An award of benefits based on temporary total disability shall cease when the physical condition of the employee has resolved itself to the point that a reasonably reliable determination of the extent of disability of the employee may be made and the employee's physical condition has improved to the point that continued, regular treatment by a physician is not required.

(2) Permanent total.

(a) For any injury producing permanent total disability of an employee to engage in any self-employment or occupation for wages, 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 injury was particularly fitted by reason of education, training, and experience, sixty-six and two-thirds percent of wages during the period of such disability.

(b) For purposes of Subparagraph (2)(a) of this Paragraph, compensation for permanent total disability shall not be awarded if the employee is engaged in any employment or self-employment regardless of the nature or character of the employment or self-employment including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain.

(c) For purposes of Subparagraph (2)(a) of this Paragraph, whenever the employee is not engaged in any employment or self-employment as described in Subparagraph (2)(b) of this Paragraph, compensation for permanent total disability shall be awarded only if the employee proves by clear and convincing evidence, unaided by any presumption of disability, that the employee is physically unable to engage in any employment or self-employment, regardless of the nature or character of the employment or self-employment, including, but not limited to, any and all odd-lot employment, sheltered employment, or employment while working in any pain, notwithstanding the location or availability of any such employment or self-employment.

(d) Notwithstanding any judgment or determination that an employee is permanently and totally disabled, if such employee subsequently has or receives any earnings, including, but not limited to, earnings from odd-lot employment, sheltered employment, or employment while working in any pain, such employee shall not receive benefits pursuant to this Paragraph but may receive benefits computed pursuant to Paragraph (3) of this Section, if applicable.

(e) The issue of permanent total disability provided herein shall not be adjudicated or determined while the employee is engaged in employment pursuant to R.S. 23:1226(G), but such employment shall not prevent adjudication or determination of the employee's right to any other benefits otherwise provided in this Chapter; however, the employee shall not by virtue of employment pursuant to R.S. 23:1226(G) be deprived of the right to determination or adjudication of permanent total disability herein at a time when he is not engaged in such employment.

(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.

(4) Permanent partial disability. In the following cases, compensation shall be solely for anatomical loss of use or amputation and shall be as follows:

(a) For the loss of a thumb, sixty-six and two-thirds percent of wages during fifty weeks.

(b) For the loss of a first finger, commonly called the index finger, sixty-six and two-thirds percent of wages during thirty weeks.

(c) For the loss of any other finger, or a big toe, sixty-six and two-thirds percent of wages during twenty weeks.

(d) For the loss of any toe, other than a big toe, sixty-six and two-thirds percent of wages during ten weeks.

(e) For the loss of a hand, sixty-six and two-thirds percent of wages during one hundred fifty weeks.

(f) For the loss of an arm, sixty-six and two-thirds percent of wages during two hundred weeks.

(g) For the loss of a foot, sixty-six and two-thirds percent of wages during one hundred twenty-five weeks.

(h) For the loss of a leg, sixty-six and two-thirds percent of wages during one hundred seventy-five weeks.

(i) For the loss of an eye, sixty-six and two-thirds percent of wages during one hundred weeks.

(j) Loss of both hands, or both arms, or both feet, or both legs, or both eyes, or one hand and one foot, or any of two thereof, or paraplegia, or quadriplegia shall, in the absence of conclusive proof of a substantial earning capacity, constitute permanent total disability.

(k) The loss of the first phalanx of the thumb or big toe, or two phalanges of any finger or toe, shall be considered to be equal to the loss of one-half of such member, and the compensation shall be one-half of the amount above specified.

(l) The loss of more than one phalanx of a thumb, or more than two phalanges of any finger or toe shall be considered as the loss of the entire member; provided, however, that in no case shall the amount received for more than one finger exceed the amount provided in this schedule for the loss of a hand, or the amount received for the loss of more than one toe exceed the amount provided in this schedule for the loss of a foot.

(m) Amputation between the elbow and the wrist shall be considered as equivalent to the loss of a hand and amputation between the knee and the ankle shall be equivalent to the loss of a foot.

(n) A permanent total anatomical loss of the use of a member is equivalent to the amputation of the member.

(o) In all cases involving a permanent partial anatomical loss of use or amputation of the members mentioned hereinabove, compensation shall bear such proportion to the number of weeks provided for herein for the total loss of such members as the percentage loss or impairment to such members bears to the total loss of the member, provided that in no case shall compensation for an injury to a member exceed the compensation payable for the loss of such member.

(p) In cases not falling within any of the provisions already made, where the employee is seriously and permanently disfigured or suffers a permanent hearing loss solely due to a single traumatic accident, or where the usefulness of the physical function of the respiratory system, gastrointestinal system, or genito-urinary system, as contained within the thoracic or abdominal cavities, is seriously and permanently impaired, compensation not to exceed sixty-six and two-thirds percent of wages for a period not to exceed one hundred weeks may be awarded. In cases where compensation is so awarded, when the disability is susceptible to percentage determination, compensation shall be established in the proportions set forth in Subparagraph (o) of this Paragraph. In cases where compensation is so awarded, when the disability is not susceptible to percentage determination, compensation as is reasonable shall be established in proportion to the compensation hereinabove specifically provided in the cases of specific disability.

(q) No benefits shall be awarded or payable in this Paragraph unless the percentage of the anatomical loss of use or amputation, as provided in Subparagraphs (a) through (o) of this Paragraph or the percentage of the loss of physical function as provided in Subparagraph (p) or (s) of this Paragraph is as established in the most recent edition of the American Medical Association's "Guides to the Evaluation of Permanent Impairment".

(r)(i) In all claims for inguinal hernia, it must be established by a preponderance of the evidence that the hernia resulted from injury by accident arising out of and in the course and scope of employment; that the accident was reported promptly to the employer, and that the employee was attended by a licensed physician within thirty days thereafter.

(ii) If the employee submits to treatment, including surgery, recommended by a competent physician or surgeon, the employer or insurer shall pay compensation benefits as elsewhere fixed by this Chapter.

(iii) If the employee refuses to submit to such recommended treatment, including surgery, and establishes by a preponderance of the evidence that his refusal is based upon his conscientious religious objection thereto or that such recommended treatment, including surgery, involves an unusual and serious danger to him, the employer or insurer shall pay compensation benefits as elsewhere fixed by this Chapter. In all other cases of the employee's refusal to submit to such recommended treatment, including surgery, the employer shall provide all necessary first aid and medical treatment and supply the necessary truss, support, or other mechanical appliance at a total cost not in excess of six hundred dollars. In addition, the employer shall pay compensation for a period not to exceed twenty-six weeks.

(iv) Recurrence of the hernia following surgery shall be considered as a separate hernia, and the provisions and limitations of this Subparagraph shall apply.

(s)(i) In addition to any other benefits to which an injured employee may be entitled under this Chapter, any employee suffering an injury as a result of an accident arising out of and in the course and scope of his employment shall be entitled to a sum of fifty thousand dollars, payable within one year after the date of the injury. Interest on such payment shall not commence to accrue until after it becomes payable. Such payment shall not be subject to any offset for payment of any other benefit under this Chapter. Such payment shall not be subject to a claim for attorney fees; however, attorney fees may be awarded in a claim to collect such payment pursuant to R.S. 23:1201.2.

(ii) In any claim for an injury, it must be established by clear and convincing evidence that the employee suffers an injury and that such resulted from an accident arising out of and in the course and scope of his employment. Nothing herein shall limit the right of any party to obtain a second medical opinion or, in appropriate cases, the opinion of an additional medical opinion medical examiner pursuant to R.S. 23:1123.

(iii) Only the following injuries shall be considered injuries for which benefits pursuant to this Subparagraph may be claimed:

(aa) Paraplegia or quadriplegia or the total anatomical loss of both hands, or both arms, or both feet, or both legs, or both eyes, or one hand and one foot, or any of two thereof; however, functional loss or loss of use shall not constitute anatomical loss.

(bb) Third degree burns of forty percent or more of the total body surface.

(iv) Notwithstanding the provisions of R.S. 23:1291.1 and 1377, any benefit paid pursuant to this Subparagraph shall be reported to the office separately from any other benefit paid pursuant to this Chapter and shall not be subject to assessment by the office or by the Louisiana Workers' Compensation Second Injury Board.

(v) Repealed by Acts 2006, No. 494, §1.

Amended by Acts 1996, 1st Ex. Sess., No. 31, §1, eff. May 1, 1996; Acts 1997, No. 1172, §4, eff. June 30, 1997; Acts 1999, No. 444, §1, eff. June 18, 1999; Acts 1999, No. 702, §1; Acts 1999, No. 776, §1; Acts 2001, No. 522, §1; Acts 2001, No. 1014, §1, eff. June 27, 2001; Acts 2001, No. 1070, §1; Acts 2003, No. 306, §1; Acts 2006, No. 494, §1; Acts 2012, No. 860, §1; Acts 2017, No. 381, §2, eff. June 23, 2017.

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