Cost-of-Living Adjustments Help Injured Workers Keep Up With Inflation

Every year around this time, the ABRAMS LANDAU workers’ comp team gets a notification that clients may be entitled to an increase in their weekly compensation checks, per yearly cost-of-living adjustments (COLA). They receive this “notification of possible COLA entitlement” so that clients can show proof that they are not receiving Social Security disability income payments. If they are receiving Social Security disability payments that, together with their workers’ comp checks, equal more than 80% of their pre-injury average weekly wage, then the Virginia Workers’ Compensation Commission will not pay for the insurance company or third-party administrator to pay the additional cost-of-living adjustment. This cost-of-living money is based upon the consumer price index, and some years it goes up just a small fraction of a percent. In other years it can be much more substantial, depending on inflation and other factors. 
One of these notifications that came across Herndon injury and disability lawyer Doug Landau’s desk recently looked like this (personal information and file identification data redacted):

Claim Administrator: ESIS, INC
Jurisdiction Claim No.: XXXX
Event Id: XXXX
Claim Administrator File No: XXXXXX
Date of Injury: 06-XX-1994
Notification of Possible COLA Entitlement
Filing Party Type: Received by VWC
Notification of Possible COLA Entitlement

As this case dates back to 1994, this client would have 26 years of cost-of-living adjustments added to his original workers’ compensation check, potentially doubling the amount of tax-free weekly income he and his family could expect under the AWARD that the Abrams Landau workers’ comp team won for him in court all those years ago. His is an unusual case. Lawyer Landau won for him an Award of “permanent total disability” (PTD) benefits. This is the only exception to the 500-week limit that Virginia and the District of Columbia have on indemnity payments for severely injured workers. Had this young individual died when he fell off of the bridge in Orange, Virginia, his dependent family members could expect only up to 500 weeks of compensation payments.
Minimum Rate
Maximum Rate
2021 $298.75 $1,195.00 1.4%
2020 $284.25 $1,137.00 2.3%
2019 $275.50 $1,102.00 1.85%
2018 $270.50 $1,082.0 2.15%
While the wonderful folks at Zeffirelli’s Italian Restaurant in Herndon do not believe in minimum or maximum portions at their fine establishment, the Virginia Workers’ Compensation Commission (VWC) sets a minimum comp rate each year so as to keep injured employees from having to scrape by at below minimum wage. At the same time, the VWC’s maximum comp rate protects the insurance industry and third-party administrators (“TPAs”) from having to pay large indemnity checks each week to high wage earners, thus keeping the cost of insurance low for companies in the Commonwealth of Virginia. The amazing Zeffirelli staff brought meals over to the Abrams Landau Law Shop, as they are located only 2 blocks away in the Historic Downtown District of Herndon, and the WC Team has enjoyed a number of terrific Italian meals at this well-known restaurant.

So, what do all these numbers mean?

Max Compensation Rate

The maximum compensation rate is a ceiling, so that the insurance companies and third-party administrators know what their maximum liability will be for paying weekly wage loss checks. Normally, compensation for on-the-job injuries is set to 2/3 of the average weekly wage. But if you make a lot (over $1,800.00/week gross, before taxes), you don’t get 2/3 of your average weekly wage if you are hurt on the job. In fact, if you are an airline pilot, experienced union carpenter, or other skilled tradesman or professional grossing $150,000/year, the workers’ comp insurance company will only be ordered to pay you about 41 cents on the dollar! This is why so many higher-earning clients of Abrams Landau Injury Law Firm are especially motivated to return to work; because they cannot possibly meet their bills and obligations while out on Virginia Workers’ Comp. 

Minimum Compensation Rate

And what is the minimum compensation rate? If you work full time, and make very little, you’ll get at least the minimum rate. Say you made $300/week pre-injury, and then your authorized treating doctor writes you disability slips due to the fact that you cannot work. Rather than receiving $200/week, you would receive the minimum comp rate for that year. So if your industrial injury occurred in 2018, your weekly comp rate while out of work would be $270.50.

Just how much difference can cost-of-living adjustments make for me?

COLA can add significantly to the value of a case. By way of example, if a worker was injured in 2017, earning $900.00, so that her full weekly comp rate was $600.00, by 2021 her weekly comp rate will now be $647.54. If the injured worker failed to request cost-of-living adjustments for those years, or their counsel did not know how to do so, they would only be receiving 92% of what they should be getting 5 years post-injury. And if the claim went to the 500-week mark, cost-of-living adjustments could add tens of thousands of dollars in wage loss indemnity benefits.

While there is no cost-of-living adjustment for Permanent Partial Disability (PPD) checks in those cases where there’s a permanency rating, nor are COLA available in cases involving Temporary Partial Disability checks, this aspect of workers’ compensation law is often overlooked. Failing to properly assert this legal right can cost disabled Virginia workers, and their families, thousands of dollars a year in tax-free benefits. 

If you or someone you know was injured at work or while working due to no fault of your own, please give us a call (703-796-9555) or email us at Abrams Landau, Ltd.