Huge SAWW Increase Will Require a Record Increase in California WC Benefits in 2022

Updated data from the U.S. Department of Labor show that California’s State Average Weekly Wage (SAWW) was up 13.5213 percent in the 12 months ending March 31, 2021, which as of January 1, 2022 will require a record increase in workers’ compensation weekly temporary disability rates as well as several other workers’ compensation benefits that are tied to the SAWW.  

Labor Code §4453(a)(10) ties 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, 2020 was $1,383, while the updated SAWW for the 12 months ending March 31, 2021 was $1,570 – an increase of 13.5213 percent.  As a result, claims administrators will need to increase TTD and PTD rates for AY 2022 claims as noted below.

In addition to the new rates for AY 2022 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 nine 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, 2022 claims administrators will need to increase these workers’ PTD and life pension payments to reflect the 13.5213 percent 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, 2022, the weekly maximum rate for death benefit installment payments will increase to the new TTD maximum of $1,539.71 for 2022. At the same time, the minimum weekly rate for death benefit installment payments will climb to $230.95, the first time ever that the minimum has exceeded the $224 minimum set by LC §4703(b).

CWCI encourages claims administrators to review all changes in benefit rates and payments with counsel to assure that adjustments are accurate.  For reference, the SAWW for the 12 months ending March 31, 2020 and for the 12 months ending March 31, 2021 can be found in the U.S. Department of Labor Unemployment Insurance database, which is posted at https://oui.doleta.gov/unemploy/data_summary/DataSum.asp.  As noted in our September 22 Executive Memo, the DWC, relying on a much lower, incorrect SAWW amount that the Department of Labor (DOL) posted last month, initially announced that there would be no benefit increases required in 2022, but the Division subsequently retracted that announcement.  We have advised the DWC that the DOL data tables have now been revised, and the DEU manager has confirmed that the TD rates shown above are correct.  A DWC Newsline announcing these rates is expected shortly, and CWCI will also issue a Bulletin and news release which, along with this memo, will be available to members who log on to our website at www.cwci.org.

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