Tag Archives: cost of living

Increase in mileage payments necessary for injured workers in Nebraska, but inflation erodes the value of workers’ compensation benefits

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In Nebraska workers’ compensation benefits are not indexed for inflation. Further inflation can work to decrease the amount of benefits paid in addition to the value of those benefits.

The Nebraska Workers’ Compensation Court announced earlier this month that mileage reimbursement for medical and vocational travel will increase from $.585 per mile to $.625 a mile effective July 1, 2022.

The rule change should benefit injured workers – particularly those who live in rural parts of Nebraska who are often required to travel long distances to larger cities for specialized medical care. But increased travel costs are part of a broader trend of rising inflation. That trend will impact injured workers in less helpful ways. 

Workers’ compensation benefits are set by an employee’s wages at or near the time of injury. Inflation is rising at a rate higher that wages. So workers are starting their claims with reduced real wages.

Inflation is bad for injured workers in Nebraska (and most places) for other reasons. In Nebraska, weekly workers compensation benefits are fixed at earnings near the time of injury. Nebraska doesn’t adjust those benefits for inflation. Even when inflation was more moderate injured workers got a raw deal because the value of their benefits declined relative to inflation. Higher inflation just further erodes the grand bargain of workers’ compensations.

But inflation doesn’t just decrease the purchasing power of workers’ compensation benefits, it can reduce the nominal or gross amount of benefits awarded.

An award of permanent disability benefits is based on how the injury effects a person’s ability to earn a living. Further, injured workers who have long lasting injuries often have their disability determined by wages at the time they healed from their injury. So even if an employee can’t increase their benefits for inflation, their earning power is based wages that have inflated while they have been healing from their injury.

Again, even during times of modest inflation workers could get nickeled and dimed a 2.5-5 percent of loss of earning power based on inflation. Higher inflation will probably mean that loss of earning power benefits will be further discounted. I’ve written about how to argue against using inflation in lost of earning power analysis. I think those kinds of arguments will be more urgent with higher inflation, but I don’t know how appellate courts will come down on the issue.

While higher inflation is an overall negative for most injured employees, there could be some positive effects of higher inflation.

One bit of good news is that higher transportation costs could increase awards of permanent disability

An award of permanent disability benefits is based on how the injury effects a person’s ability to earn a living. That hinges in part on where you live. Commute costs factor into the amount of available jobs and will be considered by Judges in how disabled an individual is for the purposes of workers’ compensation. Higher commuting costs tend to lead to higher disability awards.

Commute costs can also be a decisive factor in deciding whether an employee is permanently partially or permanently totally disabled. Permanent partial disability benefits are limited to 300 weeks while permanent total disability benefits are paid out over a lifetime. The difference can amount to hundreds of thousands of dollars.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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A common sense decision on loss of earning power and inflation from Mississippi

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The Mississippi Court of Appeals found that a worker who was still employed with their employer and earning a higher wage than before the injury was still entitled to an award of 20 percent loss of earning power.

So a lot of workers comp. heads who read this blog may wonder why this decision blogworthy and why it applies to Nebraska?

The answer to those questions is 1) I think the reasoning behind Chambers v. Howard Industries is interesting and it questions some assumption behind a recent Nebraska Supreme Court case on apportioning benefits to previous injuries.

In his post on Chambers, commentator Thomas Robinson pointed out that the plaintiff proved that since his job was altered to fit his restrictions that helped prove that he had lost earning capacity which is different than wages earned. The Mississippi Court was also persuaded by the fact that average wages had increased between the time of the plaintiff’s injury and the award, so an increase in wages wouldn’t necessarily equate in an increase in earning power.

I think the Chambers decision is also fair and equitable in that workers are stuck with benefit rates based on their date of injury. Additionally, in Nebraska, workers’ compensation benefits don’t increase along with the cost of living or inflation. Fairness should dictate employers can’t use inflation to decrease benefit payments to workers under these circumstances.

Apportionment

This summer the Nebraska Supreme Court more or less ignored these arguments in the Picard case. In Picard the Nebraska Supreme Court found it was error to award an injured worker additional loss of earning power benefits for an injury to a different body parts because they were working for the same employer at a higher wage.

Chambers is distinguishable from Picard in that Chambers didn’t involve apportioning benefits paid from a prior injury. Mississippi law is also different from Nebraska law in that there is a formal presumption that an employee who is earning more after an injury does not have a loss of earning power. At least in cases where there was prior payment of loss of earning power, courts in Nebraska are still clearly looking at how an injury effects your ability to earn wages and not solely earned wages post-injury in determining loss of earning power.

I believe the Chambers decision adds some persuasive weight for employees arguing that overall increases in wages should not factor into determinations about loss of earning power. It’s not unusual to try workers compensation cases a 2-3 years after a date of injury. From 2018 to 2021, the average wage in Nebraska has increased nearly 10 percent. Chambers stands for the proposition of law that increases in wages in line with the overall increase in wages should not factor into a loss of earning power analysis.

Close cases with two member LOEP

While a 10 percent different in wages may seem relatively insignificant it may mean the difference between an employee being found to have a 30 percent loss of earning power for the purposes of a multi-member impairment and being stuck with compensation for scheduled member impairment for purposes of Neb. Rev. Stat. 48-121(3)

Loss of earning power is determined by a formula that takes wages, education, location and other factors in to account. Changes to the variables in the formula can lead to significant changes in loss of earning power. The difference between compensating and injury based on scheduled member impairments or at 30 percent loss of earning capacity can add up to 45-60 weeks of benefits which for an employee earning $15 per hour for a 40 hour week can up to between $18,000-$24,000.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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Small Increase Predicted for Social Security COLA

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Social Security benefits are slated to go up, but not by much. “The cost-of-living adjustment in Social Security for 2014 is likely to be very small, marking the fourth year in the last five that recipients receive little or no increase in benefits,” according to a recent CNNMoney article

The American Institute for Economic Research estimates the increase to be 1.4% to 1.6%.  Last year’s increase was 1.7%, and the 2012 increase of 3.6% was the only “significant rise in benefits in recent years,” according to the article.

If there are questions about your specific legal situation, please contact the firm.

The offices of Rehm, Bennett, Moore & Rehm, which also sponsors the Trucker Lawyers website, are located in Lincoln and Omaha, Nebraska. Five attorneys represent plaintiffs in workers’ compensation, personal injury, employment and Social Security disability claims. The firm’s lawyers have combined experience of more than 95 years of practice representing injured workers and truck drivers in Nebraska, Iowa and other states with Nebraska and Iowa jurisdiction. The lawyers regularly represent hurt truck drivers and often sue Crete Carrier Corporation, K&B Trucking, Werner Enterprises, UPS, and FedEx. Lawyers in the firm hold licenses in Nebraska and Iowa and are active in groups such as the College of Workers’ Compensation Lawyers, Workers' Injury Law & Advocacy Group (WILG), American Association for Justice (AAJ), the Nebraska Association of Trial Attorneys (NATA), and the American Board of Trial Advocates (ABOTA). We have the knowledge, experience and toughness to win rightful compensation for people who have been injured or mistreated.

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