SAWW Increase Will Boost California Workers' Comp Benefits in 2021

The Department of Labor reports that California’s State Average Weekly Wage (SAWW) rose 4.3774 percent in the 12 months ending March 31, 2020, which as of January 1, 2021 will boost several 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, 2019 was $1,325, while the just-released SAWW for the 12 months ending March 31, 2020 was $1,383 – an increase of 4.3774 percent.  As a result, claims administrators will need to increase TTD and PTD rates for AY 2021 claims by that percentage.

In addition to the new rates for AY 2021 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 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, 2021 claims administrators will need to increase these workers’ PTD and life pension payments by 1.043774 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, 2021, the weekly maximum rate for death benefit installment payments will increase to the new TTD maximum for 2021, though under LC §4703(b) the minimum weekly rate for death benefit installment payments is $224, so the 2021 TTD minimum of $203.44 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 March 31, 2019 and for the 12 months ending March 31, 2020 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.

The Institute also has issued a Bulletin and news release on the recent change in the SAWW, which are available to members who log on to our website at www.cwci.org.

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