Nobody Ever Gets Rich on Workers Compensation.

Workers Compensation programs began a hundred years ago under a simple premise: injured workers give up the right to file a lawsuit against employers. In exchange, they receive the certainty of a pre-set schedule of compensation following workplace injury. Today, this safety net has giant holes.

13% Cut In Pay

Could you afford an unexpected and indefinite 13% cut in pay? Would this create a hardship? The likely answer is yes. But this is exactly what Ohio expects of injured workers. Compensation payments are paid at a rate of 67% of an injured worker’s average wage. Payments are not subject to tax. If net-take home pay is usually 80% of gross then, after tax, we are subjecting disabled workers to a 13% pay cut.

Seven Day Waiting Period

For short disabilities, a seven day waiting period is in place before disability comp begins. If an injured worker misses more than fourteen days, then disability comp pays back to day one. An injured worker who misses only thirteen days of work receives six days of disability (at 67%) for a 69% income reduction.

Sure, the injured worker can use vacation or sick pay. Is it fair to expect this? Especially where injury occurred due to employer negligence? Also, does this policy encourage employees to stay off work longer than necessary to cross that fourteen day threshold?

High Wage Earners

In 2017, the maximum weekly benefit is $902 per week. You would have to demonstrate earnings of $47,355 to receive that amount. If you were a disabled RN earning $90,000 per year then you would receive that same $902 per week – or 53% of pre-injury earnings. Is it fair to give a negligent employer a 47% off coupon?

Career Ending Injuries

Victims of career ending injuries suffer the worst under Ohio’s system of workers compensation. A well-paid construction worker with a severe back injury could receive disability until the injury reached “maximum medical improvement.” If that worker could perform ANY other type of work (i.e., parking-lot attendant, movie theater ticket taker, etc.) they would be considered PARTIALLY disabled and receive a modest (usually <$20,000) lump-sum award. He or she may also be eligible to receive wage-loss compensation equal to 2/3 of lost earnings for no more than 200 weeks.

What happens after 200 weeks? Nothing. The well-paid construction worker might see his or her income drop from $60k to 30k (or less) per year with no form of compensation to make up for this loss. Think it doesn’t happen? Guess again. Why 200 weeks? Because that is the amount set by the Ohio legislature.

Conclusion

Most people don’t realize how close they are to the edge of financial collapse. What began as a means of avoiding the courtroom has morphed into a system that insulates employers from liability but financially ruins the disabled employee. The cost of workers compensation programs has dropped dramatically in Ohio. Shouldn’t the pendulum begin to shift back to this program’s original purpose?

For more information, read The Uncompensated Worker: The Financial Impact of Workers’ Comp on Injured Workers & Their Families.