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How Are Workers’ Compensation Benefits Calculated?

Repairman in factoryIf you have been injured at work, one of your first questions will likely center on the amount of compensation you will be entitled to receive under New Jersey’s work comp laws. Here’s how benefits are calculated.

Temporary Benefits

The first thing the workers’ compensation insurer will determine, provided your claim has been approved, is how long it will be before you can return to work, or if you will be expected to return to work. If your injury is considered temporary, the insurance company will typically pay you at a rate equal to 70% of your average weekly wage for the last 52 weeks. There is a ceiling, however, on the amount that can be paid—employers do not have to pay more than 75% of the “state average weekly wage (the SAWW). An employer cannot pay less than 20% of the SAWW.

Permanent Benefits

If it’s clear that you won’t be able to return to work, or that you will have some level of permanent disability, the benefits payments are calculated differently. You will receive temporary benefits until you reach what is known as “Maximum Medical Improvement (MMI).” Once you’ve made MMI (according to medical professionals), a determination will be made as to the degree of permanent disability/injury you will have. The workers’ compensation laws include a schedule of payments for any injuries that can be specifically identified, such as the loss of a finger or toe, or loss of the use of an arm or leg. If you have a “scheduled” injury, i.e., one that is listed on that schedule, you will receive a designated amount of compensation for a specified number of weeks. If your injury is not on the schedule, your attorney will typically work with the Division of Workers’ Compensation or the insurer to negotiate a settlement. As a general rule, the more serious the injury, the greater the percentage of average weekly wage.

There are minimum and maximum amounts that must or can be paid—no less than $35 per week and no more than $792 per week. In addition, even though called permanent, the benefits are only payable initially for 450 weeks. To extend benefits any further, you must show that the injury still exists.

Contact Our Office

For a free initial consultation, contact our office online or call us at 973-993-8787. We have office locations in Morristown and Newton, but will visit you in your home or the hospital, if necessary.