WORKERS’ COMPENSATION PAYMENTS
By Dennis R. Kurth, Associate Attorney
Workers’ Compensation Specialist
A workers’ compensation claimant in Arizona should know exactly how and when indemnity benefits are paid under the statute. First, on any case where time lost benefits are indicated, the carrier must get wage/payroll information from the employer and set the average monthly wage.
The average monthly wage is the basis for the payment of all indemnity benefits. The AMW is presumed to be the claimant’s gross earnings in the thirty days before the injury unless there is some good reason to use an expanded wage base. The claimant should understand that the AMW is not the amount of compensation payable monthly but that the maximum payment is always just two-thirds of the AMW during the period of the total disability, temporary or permanent.
Compensation is not paid for the first seven days after the injury unless the claimant’s disability continues for one week beyond the first seven days. Compensation payments must be in the form of “…a negotiable instrument, payable immediately upon demand.” (a check) (A.R.S. §23-1062(D)). Electronic direct deposits into claimants’ accounts and prepaid debit card accounts are allowed at the claimant’s election.
Compensation for total temporary disability, where the claimant is on a no-work status, is payable every fourteen days under the statute. The amount of each payment is determined by breaking compensation down to a daily rate by multiplying the average monthly wage by the factor .021918. That figure is multiplied by fourteen to arrive at the amount of each check. If there are dependents, the claimant receives an additional $25.00 per month or .8219 dollars per day. Some carriers, like The Hartford, pay temporary total compensation weekly but that is not required.
Compensation for temporary partial disability, where the claimant has been released to light work and may have some earnings below the average monthly wage, is calculated much differently. First, the average monthly wage is divided by 30.416 to get the daily rate. Then the daily rate is multiplied by the number of days in the period, usually thirty. Next, any actual earnings are subtracted and finally the net figure is multiplied by .667 to arrive at the amount owed to the claimant. If the claimant has no earnings to report, compensation would be the same as the daily rate for temporary total compensation.
Permanent compensation benefits are always paid once a month and vary depending on whether the claimant has a scheduled or unscheduled award. Scheduled benefits are those set forth in the statute for permanent injuries to the limbs including fingers, toes, etc. as well as the eyes and ears (hearing). Benefits for scheduled injuries are paid for a certain and limited number of months set forth in the statute and based on the numerical disability rating. The monthly scheduled payments are paid at the rate of 50% of the average monthly wage if the claimant can return to regular work and 75% of the average monthly wage if the claimant cannot.
Compensation for permanent unscheduled injuries (affecting the back, shoulders or trunk of the body) is set by the Industrial Commission based upon an analysis of the claimant’s earning capacity. A claimant who cannot return to regular work but can do a lighter, lower-paying job, receives 55% of the difference between his/her post-injury earning capacity and average monthly wage. A person who is totally disabled, however, receives 66.7% of his/her average monthly wage.