Temporary Disability Awards
The amount of compensation due to an injured worker depends on a plethora of factors. The Workers’ Compensation Act (“the Act”) reflects as much. For example, compensation rates turn on whether a disability is “partial” or “total,” as well as “temporary” or “permanent.” This article will focus on temporary disability awards.
A workers’ compensation claimant may initially receive temporary disability benefits before eventually qualifying for a permanent award. An employee is temporarily disabled during the period of time in which the employee is considered to be healing.
The best explanation for entitlement to temporary disability benefits is to imagine an unfortunate employee that is the victim of a compensable event resulting in an amputation. While the employee receives emergency care, surgical procedures, and physical and/or emotional treatment that continues to improve their physical and mental well being, the employee is entitled to temporary disability benefits as long as the employee is unable to return to preinjury wage levels at their former place of employment. However, for lack of a better phrase, once the employee’s stump has healed the benefits may be stopped. The employee may continue to need periodic medical examinations and maintenance physical therapy or emotional counseling, but the purpose of the care has changed from improvement to maintaining the status quo. It is at that point that temporary disability benefits may be terminated, even if the employee continues to receive treatment and continues to be unable to return to work.[1]
Temporary Total v. Temporary Partial
Further, the Act distinguishes between “temporary total” disability and “temporary partial” disability (“TT” and “TP” respectively). An employee is temporarily and “totally” disabled when, because of the work-incurred injury, the employee is “wholly disabled” and unable to work.[2] The inquiry refers to the specific job that the employee had at the time of the injury, and not to any possible form of employment.[3]
On the other hand, an injured worker may qualify for a temporary partial award, rather than a temporary total award. Such is the case when an employee returns to work on a part-time basis while still recovering.[4] Again, the disability would be considered temporary during the healing process, but because the employee is not totally unable to work, the rate of compensation is adjusted accordingly.[5]
Calculating Temporary Disability Awards
Under the Act’s specific language, TT benefits are calculated pursuant to an employee’s average weekly wage, whereas TP benefits considers a broader “wage earning capacity.”[6] In both contexts, however, the average weekly wage in the state of Maryland for the year in which an injury occurs is relevant to the calculation. That is, an individual award may be limited by the state average.
In regard to temporary total disability, “payments to the claimant will equal two-thirds of their average weekly wage, not to exceed the average weekly wage of the state for the year in which the injury occurred.”[7] In contrast, temporary partial benefits are calculated by determining the difference between the injured worker’s present earnings and his or her pre-injury wage.[8] Specifically, TP benefits are equivalent to 50% of the difference between the employees pre- and post-injury wages.[9] Again, “[h]owever, the amount received may not exceed 50% of the state average weekly wage for the year of the injury.”[10]
Moreover, regardless of whether a claimant is receiving TT or PT benefits, the awards are non-taxable.[11] Additionally, there is no time limit for which an injured employee may receive temporary disability benefits.[12] So long as the injured worker has not yet reached “maximum medical improvement” – i.e. so long as employee is still healing – then the injured worker is indefinitely entitled to temporary disability.[13]
Once the healing process has concluded, then an employee’s entitlement to temporary disability terminates. This is true even if the employee is unable to return to his or her former position.[14] However, although temporary benefits may discontinue, the employee could potentially then qualify for a permanent disability award.[15]
[1] 1 MD Workers’ Compensation § 11:1, General principles (emphasis added).
[2] 1 MD Workers’ Compensation § 11:4, Entitlement to temporary total benefits.
[3] Id.
[4] See 1 MD Workers’ Compensation § 11:5, Entitlement to temporary partial benefits.
[5] Id.
[6] But see 1 MD Workers’ Compensation § 11:5, Entitlement to temporary partial benefits (“[t]he code refers to wage earning capacity as opposed to actual wages when making the TP benefit calculation. Generally, the Commission will use the actual wages earned by the employee to make the calculation. However, the use of the term “capacity” suggests that actual wages are not required or may not always be the appropriate guide. This could both be to the detriment or benefit of the employee.”) (emphasis added). In other words, for practical purposes, TP awards are often calculated like TT awards; i.e. per an employee’s actual wages.
[7] 1 MD Workers’ Compensation 11:4, Entitlement to temporary total benefits (citing Md. Code Ann., Lab. & Empl. § 9-621(a)(1)).
[8] 1 MD Workers’ Compensation § 11:5, Entitlement to temporary partial benefits (citing Md. Code Ann., Lab. & Empl. § 9-615).
[9] Id.
[10] 1 MD Workers’ Compensation § 11:5, Entitlement to temporary partial benefits.
[11] Id.
[12] 1 MD Workers’ Compensation § 11:5, Entitlement to temporary partial benefits (citing Md. Code Ann., Lab. & Empl. § 9-615).
[13] See supra note 1.
[14] 1 MD Workers’ Compensation § 11:1, General principles.
[15] 1 MD Workers’ Compensation § 11:4, Entitlement to temporary total benefits.
