Heads Up: DWC Newsline Overstates SAWW Increase, Required Benefit Increases for 2020

Labor Code section 4453(a) (10) requires that each year, the minimum and maximum weekly TTD rates be increased by an amount equal to the percentage increase in the State Average Weekly Wage (SAWW) as compared to the prior year. The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor (DOL) for California for the 12 months ending March 31 in the year preceding the injury. 

Yesterday DWC issued a Newsline, which based on a miscalculation, overstated the 2018-2019 increase in the SAWW — announcing that the SAWW increased 6.61581% last year.  This in turn overstated the required change in the minimum and maximum TD rates effective 1/1/20.  If left uncorrected, this also would have led to excessive PTD and life pension COLAs as well as excessive increases in death benefit installment payments.

In reviewing the DOL data tables, which have been reformatted this year, CWCI found that the Division miscalculated the 2018-2019 SAWW increase by comparing the figure reported for the third quarter of 2017 ($1,243) to the figure reported for the first quarter of 2019 ($1,325), thus noting the 18-month SAWW increase rather than a 12-month increase.  After adjusting the calculation to compare the SAWW from the first quarter of 2018 to the SAWW from the first quarter of 2019, we calculated that the annual increase was 3.84%, not 6.61581%.  This means that the new minimum weekly TD rate for 2020 injuries should be $194.92 (not $200.13 as announced by DWC), and the new maximum should be $1,299.43 (not $1,334.17).

We alerted the DWC yesterday afternoon, and this morning received confirmation that their calculations and the resulting rates were incorrect.  They plan to issue another Newsline to alert the community, but the original information has already been reprinted in the trade press and distributed by wire services, so please be advised that the announcement by the DWC yesterday overstates the SAWW increase and the required TD increases for 2020, and do not make any plans or adjustments to your systems based on these figures. CWCI will issue a Bulletin and Exec Memo confirming the new rates once the DWC has sorted out the issue and released its Newsline.  

BY/