When a worker is injured, each missed day of work represents lost wages. In workers’ compensation insurance, indemnity benefits are paid to the employee to help them cover their loss of income.
Indemnity benefit laws are determined on a state-by-state basis. Payments are a portion of the worker’s average weekly wage, and take into consideration the extent of the disability. Each state has its own rules about how to calculate the average weekly wage; for example, some states use the last 52 weeks of pay, while others use the last 13 weeks. There is a waiting period, often several days to a week, before any indemnity benefits will begin. State workers’ compensation boards also outline minimum and maximum indemnity benefits.
You can find your state’s workers’ compensation website on the U.S. Department of Labor’s State Workers’ Compensation Officials guide.
Types of Workers’ Compensation Indemnity Benefits
There are two main types of indemnity benefits, temporary and permanent, which are then further divided into two more subtypes, total and partial.
Temporary Partial Disability (TPD) is paid to workers who are medically cleared to return to work on a part time basis while they are healing from their injury. The worker would receive full payment for the hours worked each day, and receive TPD for the remainder of the hours not worked based on their original schedule. If a worker had an 8 hour shift but was able to work only 5 hours during their recovery, the TPD rate would apply to the remaining 3 hours.
Temporary Total Disability (TTD) applies to workers who are unable to work at all while they recover. Many states pay around two-thirds of the worker’s average weekly wage for TTD.
Permanent indemnity benefits apply to workers who become permanently disabled due to injury. Permanent Partial Disability (PPD) is paid to workers who have recovered enough to return to some form of work, but will always have some form of partial disability.
When an individual is unable to return to any type of work after an injury, Permanent Total Disability (PTD) comes into play. In some states, death benefits paid to a worker’s dependents fall under PTD guidelines.
When choosing your company’s workers’ comp insurance, it is important to understand your state’s requirements for indemnity benefits.
If you need assistance with a workers’ comp claim, please fill out our free evaluation for workers’ compensation cases or give us a call at (866) 559-3200. Our vocational experts will be happy to discuss your case.