DWC Issues Correction on SAWW Increase and TD Rates for 2020

Yesterday, in direct response to concerns raised by CWCI, the DWC issued a corrected version of its Newsline confirming that California’s State Average Weekly Wage (SAWW) rose just 3.84013 percent in the 12 months ending March 31, 2019, far less than the 6.61581 percent increase that the Division initially reported last Thursday.  As a result, the increase in the minimum weekly TD rates effective January 1, 2020 will be $5.22 less than the Division previously announced and the increase in the maximum weekly TD rates will be nearly $35 less than previously announced.  The revised and corrected rates are set forth below.

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 (DOL) for California for the 12 months ending March 31 in the year preceding the injury.  According to the DOL, the SAWW for the 12 months ending March 31, 2018 was $1,276, while the SAWW for the 12 months ending March 31, 2019 was $1,325 – an increase of 3.84013 percent.  As a result, claims administrators will need to increase TTD and PTD rates for AY 2020 claims by that percentage.

In addition to the new rates for AY 2020 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 [g., those involving any of the nine specified injuries listed 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.   Thus, as of January 1, 2020 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.” Accordingly, as of January 1, 2020, the weekly maximum rate for death benefit installment payments will increase to the new TTD maximum for 2020. Keep in mind, however, that under LC §4703(b) the minimum weekly rate for death benefit installment payments is $224, so the 2020 TTD minimum of $194.91 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.  For reference, the SAWW for the 12 months ending 3/31/18 and for the 12 months ending 3/31/19 are included in U.S. Department of Labor Unemployment Insurance database, which is available online at https://oui.doleta.gov/unemploy/data_summary/DataSum.asp.

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