maximum weekly income benefit Archives - Workers' Compensation Watch

Under Nebraska law, the Governor doesn’t need to sign anything to have maximum benefits increase on an annual basis.

The role of the Governor in deciding maximum rates is a good way to talk about the role played by the Executive Branch in Nebraska workers compensation law.

Nebraska’s maximum rate for workers’ compensation benefits will increase for 2021. The court has not announced by how much the amount will increase, but the fact that neither the State of Nebraska or the Nebraska Workers’ Compensation Court have announced there will be a hearing on the matter, means the rate will increase.

The process in which the maximum rate increases is a good way to discuss how the Executive Branch, can affect workers’ compensation in Nebraska. For now, that influence is limited, but as discussed below the influence may increase with a looming United State Supreme Court decision.

But to start, let’s talk about how the Governor can impact workers’ compensation in Nebraska and what the decision to increase Nebraska maximum benefit might mean in the near term.

The Governor and maximum benefit increases.

Most years, the maximum benefit increases for injured workers in Nebraska. Here is how the process works. Under Neb. Rev. Stat. 48-121.02 the Nebraska Department of Labor calculates the state average weekly wage which calculates the number of employees covered by the Nebraska Employment Security Act (unemployment) divided by their total wages. The Department of Labor then gives the number to Nebraska Workers’ Compensation Court. By law, this happens on October 1^st.

The workers compensation court then gives this data to the Governor who has until November 15^th to hold a hearing as to whether he or she will suspend maximum benefit rate increase. But by October 16^th, the Governor must announce a public hearing. So unless the Governor notices a hearing by October 16, the maximum rate will increase by the amount calculated by the Nebraska Department of Labor. There are no hearings announced as of October 18, 2020, so it’s safe to assume the maximum rate will increase in 2021.

What does the maximum benefit increase mean in the big picture?

By law, the Governor needs to consider overall economic conditions and workers’ compensation costs in as factors in deciding not to increase maximum workers’ compensation benefits. This year I thought maybe the COVID-19 induced recession may have forced the business community to ask for some relief from workers’ compensation costs. Employers have been asking for overall liability shields related to COVID. However, for this year at least, it doesn’t seem like the Governor thinks workers’ compensation costs are enough of a concern to forestall an increase in maximum benefits.

The state executive branch and Nebraska workers’ compensation

Nebraska adjudicates workers’ compensation cases within our judicial branch unlike Iowa and other states who adjudicate workers’ compensation cases in the executive branch. 48-121.01 and 48-121.02 are one of the few direct mentions of the Executive branch agencies in the Nebraska Workers’ Compensation Act. The attorney general’s office has the ability to prosecute some fraud and employer misconduct and also is involved in vocational rehabilitation benefits.

Arguably the biggest influence the executive branch has over the Nebraska Workers Compensation Court is that the Governor appoints judges. But the ability of the Governor to appoint judges is reined in by a bi-partisan Judicial Nominating Commission. The Commission forwards the names of applicants for judgeships to Governor. The Commission serves as the equivalent of a judicial human resources department that screens qualified applicants for the Governor.

And unlike the federal judiciary, state court judges in Nebraska are subject to judicial retention elections. This system of judicial nominating committees and judicial retention elections is known as the Missouri Plan. However an upcoming United States Supreme Court case could change how state’s like Nebraska select judges.

Trouble on the horizon for Judicial nominating commissions?

Earlier this month, the Supreme Court heard a case from Delaware where a judicial applicant challenged a Delaware requirement that judges to their state courts retain a partisan balance on 1^st Amendment grounds. Arguments in favor of the Delaware law pointed out that striking down this law could invalidate laws implementing judicial commissions in other states such as Nebraska.

A related challenge to judicial nominating committees could be the non-delegation doctrine which holds that Legislative branches can’t delegate their powers to other branches of the government or even private agencies. Non-delegation challenges have largely failed in Nebraska, but the addition of Brett Kavanaugh and likely addition of Amy Coney Barrett could mean the United State Supreme Court revives this doctrine. Nebraska law gives the Nebraska State Bar Association a role in selecting lawyer members of the Judicial Nominating Commissions.

If appellate courts held Nebraska’s methods of selecting judges is unconstitutional it would likely set off a legislative and political scramble.

On Jan. 1, 2017, the maximum weekly income benefit under the Nebraska Workers’ Compensation Act was increased to $817 from the 2016 maximum rate of $785 per week. The minimum rate remains unchanged at $49 per week.

Mileage reimbursement rates for Nebraska actually decreased this year to 53.5 cents per mile, down from 54 cents per mile in 2016. For details about mileage reimbursement for workers’ compensation claims, please see these previous blog posts here and here.

The maximum weekly benefit of $817 is 100 percent of the state’s average weekly wage, based on data provided by the Nebraska Department of Labor. Workers’ compensation disability benefits are based on two-thirds of your average weekly wage. So workers who would earn more than $63,726 ($817 times 1.5 times 52) in non-overtime wages would lose out under the cap on maximum benefits. An annual salary of $63,726 works out to roughly $30.64 per hour for a 40-hour workweek.

The fact that workers’ compensation benefits are not taxable somewhat cushions the blow for workers who would lose out under the maximum rate cap, but when a worker is receiving workers’ compensation, that person can sometimes lose the benefit of the employer paying for private health insurance. Injured workers may be forced to pay employers back for paying the workers’ health insurance during a work-injury-related absence.

In most instances, calculating an injured worker’s benefit rate is a fairly simple manner. But some workers who regularly have extended times when they are not working, such as school employees, construction workers, and professional athletes, can present more challenges. If an employee is injured early in employment, then calculating average weekly wage can also be complicated.

Unfortunately, the minimum weekly income benefit remains the same at $49 per week. This amount has not changed since 1973. Often, the minimum-income benefit is not an issue in most workers’ compensation claims, because most people make well-over $73.50 per week (which would be the amount necessary for $49 per week in workers’ compensation benefits). However, this minimum-income benefit can come into play in situations where an employee only works a on a very limited basis with an employer, or simply does an odd job for an employer here or there. In those situations, a devastating injury could be paid at only $49 per week, even if the injured worker had another full-time (and much higher-paying) job if the injury occurred while working on one of those small part-time jobs. The Nebraska Legislature needs to take a look at a rate increase for the minimum for this specific reason.

Though benefit rates are capped for purposes of payment of disability, they are not capped for purposes of vocational rehabilitation or “voc rehab.” Voc rehab is intended to help an injured worker return to a job of similar pay. For example, if a worker earning $90,000 per year is injured and can’t return back to work earning $90,000 per year, that person is entitled to training that would allow the worker to return back to work at $90,000 a year. However, during that retraining, this injured worker would be limited to receiving benefits at the maximum rate for the date of the injury.

Workers earning over the maximum rate could also collect temporary partial disability up to the maximum rate if they were working at reduced time and their wages were high enough.

While the $63,726 total for a year of maximum weekly benefits would be a good income for a single person, that income would qualify a household larger than two for subsidies under the Affordable Care Act. The high price of child care often leads families to decide to have one spouse stay home and take care of the children while the other spouse works. So for higher-paid workers, even an injury where the employer/insurer takes responsibility for the injury can lead to financial turmoil.

Workers' Compensation Watch

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Tag Archives: maximum weekly income benefit

Maximum benefits rates, the Governor and Nebraska workers’ compensation

Maximum Workers’ Compensation Rate Increases to $817 a Week for 2017

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