How is Workers Compensation Injury Settlement Calculated?

Under the Workmen’s Compensation Act, compensation is offered to the workers and their dependents in case of any eventuality like injury or accident that arises in the tenure of employment resulting in disability or death.  The estimation of worker compensation settlement is done based on the incident which has led to the compensation.

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However, before estimating the settlement under the workmen compensation policy there are certain aspects that should be kept in mind. These are as following:

  • 8000 is the maximum monthly wage allowed for the computation of compensation under the Workmen’s Compensation Act.
  • The workers eligible for compensation should be 18 years old or above.
  • Worker's compensation law varies from state to state.
  • The calculation of the final settlement varies as it is based on a different formula that is used to compute this figure.

To help our readers know how worker's compensation injury settlement is calculated, further we have discussed it in detail.

Workman’s Compensation Proof

The claim for workman’s compensation differs from personal injury claims used by different individuals. A person who is injured in the workplace or during the tenure of employment will be given compensation only for the injury under workmen compensation policy and no money will be given for any suffering or pain.

Estimating a Workman’s Compensation Injury Settlement

The primary step to compute a settlement in a workman’s comp injury is to get copies of the reports referring to the accident. These reports will include the statement of witness and medical records. When a person gets injured at the workplace, the employer is required to file a claim regarding the accident and record it with the receptive state’s workman compensation agency. In case a person is injured during the employment tenure, then it is best to wait until proper recovery before filing a claim because by waiting they can make sure to avail the full amount of treating facilities.

Workman’s Compensation Ratings

The next step of settlement deals with the rating of bodily impairment.  If a person severely injured, then this rating will be 100%. The rating is decreased to 0% if the person is healed completely. This is determined based on the final medical report as received from the physician. State regulation for the percentage rating depends on the type of injury, the average time taken by an individual to heal and the salary of the person injured. The wage linked with the workman’s compensation is multiplied with the time that is taken to heal. The final amount is used for the settlement of other related things.

Future Expense and Payment

The final report that one receives also contains the estimation of future expenses that may be related to the initial accident. These costs are added to the workman com settlement. The payment is paid to the individual either temporarily or permanently, based on the extent of injuring that he/she has suffered. It is very important for an individual to consult a lawyer so that he/she can finalize a suitable schedule of payment. Also, the lawyer should deal with the value related to the final settlement. One can also include the cost of lawyer and legal fees in the workman’s compensation settlement.

Workmen Compensation in Various Situations

Let’s take a look at the workmen compensation in various situations.

  1. Compensation in Case of Death

    In case of death of an employee in the workplace, the compensation that is offered under workmen compensation policy are:

    • 5000 funeral expense is payable.
    • 60% of monthly salary X relevant factors based on the age of the worker.
    • 1,40,000 is the minimum amount payable.
  2. Compensation in Case of Total Permanent Disability

    In the case of total permanent disability of an employee due to an accident in the workplace, the compensation that is offered under workmen compensation policy are:

    • 50% of the monthly salary X relevant factor based on the age of the worker.
    • 1,20,000 is the minimum amount payable in this situation.
  3. Compensation in Case of Permanent Partial Disability

    In the case of permanent partial disability of an employee due to an accident in the workplace, the compensation that is offered under workmen compensation policy are:

    • A percentage of worker’s compensation is payable under permanent partial disability. This percentage is estimated based on the extent of reduction in the earning capacity of the worker.
  4. Compensation in Case of Temporary Disability

    In the case of the temporary disability of an employee due to an accident in the workplace, the compensation that is offered under workmen compensation policy are:

    • 25% of the monthly salary of the worker is payable every half-month.
    • Compensation is offered in case the worker is disabled for more than 3 consecutive days.
    • 5 years is the maximum term period of compensation.

Wrapping it Up!

In some cases, the employer can claim “perceived risk”. This happens when the employer rejects liability due to a claim of improper conduct on part of the employee. In case of any such situation, the employee should consult with an attorney to discuss the case, this helps to change the outcome.

Written By: PolicyBazaar - Updated: 06 March 2024

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