Marginal Increase in State Average Weekly Wage Will Require Minor Benefit Increases in 2014

California’s State Average Weekly Wage (SAWW) edged up less than three quarters of one percent during the 12 months ending March 31, 2013, just enough to require a minor increase in several types of workers’ compensation benefits beginning next January. 

Workers’ compensation reforms enacted in 2002 (AB 749 and AB 486) added §4453(a)(10) to the California Labor Code, tying minimum and maximum temporary total disability (TTD) and permanent total disability (PTD) rates to changes in the SAWW, which is the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury. The SAWW for the 12 months ending March 31, 2012, was $1,059.38, while the SAWW for the 12 months ending March 31, 2013 was $1,067.25 – an increase of 0.7429 percent. As a result, claims administrators will need to increase TTD and PTD rates for 2013 injury claims by that percentage.

In addition to the new rates for 2013 injury claims, the SAWW increase will also affect some existing claims:

      • LC §4661.5 requires any TTD payment made 2 or more years after the injury date to be based on the TTD rate in effect on the date of the payment, unless that would reduce the amount paid, so claims administrators will need to adjust payments on existing claims that are eligible for more than 104 weeks of TD [e.g. those involving any of the 9 long-term injuries noted in LC §4656(c)(3)]. 

      • LC §4659(c) provides a cost of living adjustment (COLA) for workers injured o/a January 1, 2003 who have either a PTD or a life pension, so as of January 1, 2014 claims administrators will need to increase these workers’ PTD and life pension payments to reflect the latest increase in the SAWW.

      • LC §4702(b) requires that unless the WCAB has ordered otherwise, death benefits "shall be paid in installments in the same manner and amounts as TTD indemnity would have to be made to the employee," so as of January 1, 2014, the weekly maximum rate for death benefit installment payments will increase to the new TTD maximum for 2014, though under LC §4703(b) the minimum weekly rate for death benefit installment payments is $224, so the 2014 TTD minimum should not be used to calculate minimum weekly rates for these death claims. 

CWCI encourages claims administrators to review all changes in benefit rates and payments with counsel to assure that adjustments are accurate. As a reference, the SAWW for the year ending 3/31/12 is posted at workforcesecurity.doleta.gov  and the SAWW for the year ending 3/31/13 is at ows.doleta.gov Institute members also may view a CWCI Bulletin and news release on the recent change in the SAWW at www.cwci.org.