Congratulations! You have been awarded ½ pay for full-time disability!

Our tongue-in-cheek list of ways businesses can share the pain under the wage earning capacity standard.

The concept of “wage earning capacity” has caused significant controversy in the workers’ compensation system. It allows insurance companies to use “imaginary wages” to calculate the benefit rate.

Instead of paying 80% of the employee’s average weekly wage, employers get a credit for jobs a person could theoretically perform somewhere else. But it does not matter whether the person is actually employed and earning real wages.

This is an absurd legal standard with unfair results. Here is our tongue-in-cheek list of how employers can share the pain.

1. Paid for 100 gallons of diesel fuel for your company van? Receive 25 gallons because a more fuel efficient vehicle should have been purchased.

2. Bought workers’ compensation insurance to cover all employees? Only 50% of your workforce is covered because safety technology is better these days and you should have less accidents.

3. Billed a customer for services performed? Only get paid 75% of the invoice because the job could have been done by a competitor more cheaply.

4. Paying full-time wages to your employees? Only get part-time work because similar jobs exists with less hours.

5. Purchased raw materials for a job completed last year? The price changes every 30 days until you retire or die.


Related information:

Why your “wage earning capacity” matters under Michigan workers compensation

Photo courtesy of Creative Commons, by Images_of_Money.

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