VIII. Texas Workers' Compensation

TEXAS WORKERS COMPENSATION

This is the first of several articles I will write on Texas Workers Compensation. One of the legal principles that grew with the industrial revolution is that industry is legally responsible for the injuries caused to the workers that produce the products (and profits) for industry. As more and more workers were killed, crippled, or just injured in industrial accidents, the workers started to win more and more lawsuits against their employers.

In the early 1900's, industry and employers began to lobby state legislatures for what is called "the great trade off." Under the trade off, employers and industry would guarantee medical treatment and wage indemnity for on the job injuries, in exchange for the workers losing their right to sue the employer. This is the basis for all workers compensation laws in the United States, including the State of Texas. Workers compensation is mandatory in every state in the United States, except Texas.

If you are injured on the job in Texas and your employer has workers compensation insurance, you are entitled to compensation for all of your medical expenses related to the injury, 70% of your average weekly wages until you reach "Maximum Medical Improvement", and a small disability settlement based the doctor's physical impairment rating and an impairment formula in the statute. It does not guarantee your current job or any retraining for other employment.

If your employer does not have workers compensation, the only way to be compensated for your on the job injuries in Texas is to sue your employer and collect a settlement or judgment from that lawsuit. In Texas, an employer who does not have workers compensation has a legal duty to provide a safe place to work, safe and adequate tools and equipment, and adequate assistance from other employees to do the job that needs to be done. In following articles, I will compare the advantages and disadvantages to employers who do or do not carry workers comp in Texas and discuss how the formulas work.

AVERAGE WEEKLY WAGE

This is the second in a series of articles related to Texas Workers Compensation. With the exception of medical benefits, the benefits available under Texas Workers Compensation revolve around the "Average Weekly Wage" of the injured worker. Under the law, it is the Employer's responsibility to provide accurate wage information to the workers compensation adjuster.

If an employee has worked for an employer at least 13 consecutive weeks immediately before the injury, the Average Weekly Wage is calculated by averaging the wages paid for that 13 week time period. If an injured employee has worked less than 13 weeks, the Average Weekly Wage is based on the usual wage that employer pays a similar employee for the same kind of work. If there is no similar employee, then the Average Weekly Wage is based on the usual wage paid in that vicinity for the same or similar kind of work.

This formula is based on a 40 hour work week. There are also special rules for special groups such as school employees, part-time workers, seasonal workers, workers with more than one job, minors or students, state military forces, etc.

Wages are supposed to include both "pecuniary" wages and "non-pecuniary" wages. Pecuniary wages are basically all wages paid in the form of money, such as hourly, weekly, bi-weekly, monthly, etc. wages, salary, tips, piecework, expense allowances (but not expense reimbursements), bonuses, commissions, time paid for vacations, sick leave, holidays, or personal time actually used (but not time earned and still unused), etc. Non-pecuniary wages include compensation for items such as health insurance, uniform laundry/cleaning, clothing/uniforms, lodging/housing, food/meals, vehicle fuel, etc.

The injured worker is paid only 70% of his/her Average Weekly Wage. Some of the wage items listed above are frequently left out of the Average Weekly Wage calculations, shortchanging the injured workers. It is hard to pin down whether these wage items are left out the employer's reports because of employer ignorance/laziness, or deliberately because of employer dishonesty.

PERMANENT IMPAIRMENT UNDER TEXAS WORKERS COMP

For about 80 years the Texas Workers= Comp system was based on a "loss of earning capacity.@ The injured worker's benefit for a permanent injury was based on how the injury affected the worker's ability to get and keep a job. For example, an office worker with a sedentary job would get a small benefit for a permanent back injury, but a construction worker with a permanent back injury that prevented a return to construction work might have a total and permanent disability.@ The maximum payment for total and permanent disability in 1990 was only $79,904. Remember, in Texas, if the employer has workers= comp coverage, the employee loses the right to sue the employer for any on the job injuries.

In 1989, after a major battle between the Republicans and Democrats in the Texas Legislature (the Republicans won by 2 votes), the Texas Workers= Comp system was changed to a system based on a permanent physical impairment.@ Beginning in 1991, it no longer matters in Texas whether or not the injury affects your ability to do or keep your job. The only thing that matters now is the percentage of impairment the doctor finds under the AMA Guides To The Evaluation of Permanent Impairment.

This made a dramatic difference in the benefit for a permanent injury. Under the old system a delivery truck driver, construction worker, or factory worker with a back surgery that is unable or not allowed to return to their old job may have been entitled to the $79,904 maximum impairment benefit. Under the new system, using the statutory Guides, the permanent physical impairment rating after back surgery may only be 10 to 20%. The permanent disability or impairment benefit formula under the current law is (70% of the Average Weekly Wage) x (the % of Impairment) x 3.

For example, a construction/factory worker earning $12 per hour has an Average Weekly Wage benefit of $336/week (70% of $480/week). Even with a 20% permanent impairment rating, the final impairment benefit after back surgery would be worth only $20,160 ($336/week x 20 x 3). This system works reasonably well for minor or temporary injuries. However, since Texas employers are not required to provide light duty, retrain, or reassign to lighter jobs, and many employers will not allow an injured employee to return to work without a 100% release with no restrictions, this system grossly under compensates those with serious or permanent injuries.