Workers' compensation replaces a portion of an employee's wages when a work‑related injury or illness forces them to miss work, typically paying two‑thirds of the average weekly earnings up to a state‑set maximum after any required waiting period.
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Benefit Calculation Basics
Most states base the temporary total disability (TTD) benefit on the employee's pre‑injury average weekly wage (AWW). The standard formula is:
- Benefit = AWW × 2/3 (or the state‑specified percentage)
- Benefit cannot exceed the state's maximum weekly limit
Waiting Periods and Eligibility
Before benefits begin, many jurisdictions impose a waiting period—often three days—during which the employee receives no compensation. Eligibility requires a documented work‑related injury and a filed claim within the state's deadline.
Types of Wage Replacement
Depending on recovery, workers may receive:
- Temporary Total Disability (TTD): for complete inability to work.
- Temporary Partial Disability (TPD): when the employee can perform light duty but earns less than pre‑injury wages.
- Permanent Disability: for lasting impairments, calculated using state‑specific schedules.
Impact of Employer Policies
Some employers supplement state benefits with "make‑up" pay or short‑term disability policies, which can increase the total amount received but must not duplicate state compensation.
Common Questions
Benefits typically continue until the employee returns to work, reaches maximum medical improvement, or the statutory benefit period ends. If the employee returns to a different role with reduced earnings, the compensation may adjust accordingly.