Permanent disability benefits are long-term or lifetime workers’ compensation benefits awarded to employees who suffer a permanent work-related injury (examples include the loss of a limb or paralysis). These benefits are often viewed as compensation for lost earning capacity. Permanent disability pays injured workers for the loss of work earnings they will experience in the future due to their permanent injury.
There are two categories of permanent disability workers’ comp benefits in California. These are:
- permanent total disability (PTD), and
- permanent partial disability (PPD).
Permanent total disability benefits are awarded when a worker suffers a workplace injury that results in the employee’s inability to ever return to the workforce. In these scenarios, disabled workers will receive a weekly payment, for the rest of their lives, which is equal to two-thirds the amount of the injured worker’s pre-injury weekly wage.
Permanent partial disability benefits are awarded when a worker suffers a work injury that leads to a permanent disability. The disability, however, does not render the employee 100% disabled and he/she typically returns to the workforce at some future time. The benefits are in the form of a weekly check that is equal to two-thirds the amount of the injured worker’s pre-injury weekly wage. The length of the benefits is limited to a set number of weeks as dictated under California state statute.
Disability ratings refer to percentages that get assigned to disabled workers in permanent disability cases. The percentages specify the extent to which the worker is disabled. For example, a 100% rating indicates that a worker is totally disabled and will qualify for PTD benefits. Ratings under 100% mean a worker is partially disabled and will qualify for PPD pay.
Note that there are times in these cases when a worker may disagree with a workers’ comp insurance company. In these events, it is critical for the employee to consult with an experienced workers’ comp attorney. A workers’ compensation lawyer can assist by:
- making certain that an employee’s disability rating is correct,
- helping a worker receive PPD pay for as long as possible, and
- appealing matters before California’s Workers’ Compensation Appeals Board.
Our California workers’ compensation attorneys will highlight the following in this article:
- 1. What are permanent disability workers’ compensation benefits?
- 2. How much do the benefits pay?
- 3. How are permanent disability ratings determined?
- 4. Is permanent disability paid after a worker receives temporarily disability benefits?
- 5. Are there disputes regarding permanent disability benefits?
1. What are permanent disability workers’ compensation benefits?
For the purposes of California’s workers’ compensation laws, a permanent disability is any lasting disability that a worker suffers from as the result of a work injury or illness. The disability is also one that affects the employee’s ability to earn a living.
Examples of permanent disabilities include:
- the loss of a limb,
- paralysis, and
- the loss of vision or hearing.
Permanently disabled workers are entitled to receive permanent disability workers’ compensation benefits as compensation for their inability to earn future wages.1
There are two types of permanent disability categories under California’s workers’ compensation system. These are:
- permanent total disability (PTD), and
- permanent partial disability (PPD).
For both categories, disability is calculated as a percentage from 0 to 100%. This percentage is often referred to as a “disability rating.”
1.1. Permanent total disability
Permanent total disability is where a worker suffers a work injury that renders that person totally disabled to the point where he/she will never return to the workforce again.
With severe injuries (for example, total paralysis), the law will presume that a worker is totally and permanently disabled.2 In other cases, a worker is deemed permanently and totally disabled if his/her disability rating (see section 3) totals 100%.
1.2. Permanent partial disability
Workers are partially disabled if they suffer a workplace injury and they are less than 100% totally and permanently disabled.
Most employees who suffer a permanent partial disability will be able to return to the workforce at some future time. However, they may have to undergo training to learn a new job. Under California law, permanently and partially disabled workers typically qualify for supplemental job displacement benefits that help absorb the cost of learning a new profession.
2. How much do the benefits pay?
PTD pay is a weekly payment that is two-thirds the amount of the worker’s pre-injury weekly wage. Employees receive PTD pay once a week for the rest of their life.
As with PTD pay, the amount of a worker’s PPD pay is two-thirds the amount of the employee’s pre-injury weekly wage. Workers will receive PPD pay once a week.
But unlike with PTD pay, workers do not receive PPD pay for the rest of their life. Rather, permanent partial disability pay is limited to a set number of weeks as dictated under California state statute.3
California Labor Code 4658 sets forth the time periods for which disabled workers are allowed to collect PPD pay. The time periods vary depending on:
- the date of the worker’s injury, and
- the worker’s disability rating.4
For example, if a worker was injured in 2017, and his/her disability rating is 50%, the employee will receive disability payments for 400 weeks.
3. How are permanent disability ratings determined?
The process for arriving at a worker’s disability rating is often complex and it involves a variety of different steps. These include:
- medical reports and assignment of impairment ratings, and
- conversions into permanent disability ratings, and
3.1. Medical reports and assignment of impairment ratings
A worker that suffers a permanent work injury will receive emergency care and eventually see a treating physician. The treating physician will evaluate the employee and issue a medical report that describes the extent of the worker’s disability.
For example, a doctor may write in a report that an employee suffered:
- the complete loss of a finger, or
- a permanent loss in the range of motion of his/her knee.
The treating doctor then uses the findings and conclusions in the report to issue a specific impairment rating for each body part that a worker permanently injures.
The doctor makes this rating based on The AMA Guides. This is a book that provides a method for rating each part of the body based on the doctor’s evaluation and other medical information such as an MRI.
The ultimate impairment rating is considered a worker’s “whole person impairment.”
Example: Brandon injured his low back at work. His doctor takes measurements of Brandon’s ability to move his low back, considers his pain level, and reviews his MRI results. Based on this information, the doctor writes a report that says Brandon has 8% whole person impairment.
3.2. Conversions into permanent disability ratings
Once a doctor issues a whole person impairment percentage, it is converted into a permanent disability rating.
Physicians and workers’ comp personnel obtain the value of this rating by using the Permanent Disability Rating Schedule. The latter sets forth a formula which determines a permanent disability rating after considering several factors. Some of these include:
- the type of injury a worker experienced,
- the worker’s specific job title and duties,
- the employee’s age, and
- the likely change in the employee’s future earning capacity.
4. Is permanent disability paid after a worker receives temporarily disability benefits?
In cases of permanent work injuries, it typically takes some time for physicians and California’s workers’ compensation system to arrive at disability ratings and specific permanent disability benefit amounts.
Most workers, then, that suffer a permanent injury will typically receive temporary disability benefits before receiving PTD or PPD pay.
Note that permanent disability cannot be paid while an employee is receiving temporary disability.
Further, if an injury causes a permanent disability, the injured worker should receive his/her first permanent disability payment within 14 days after he/she receives the last payment of temporary disability. Even if the insurance company does not know the amount of permanent disability, the insurer should estimate it and make payments in that amount.5
If a permanent disability worker’s comp payment is late, the insurance company must pay the affected employee a penalty. This amounts to an additional 10% of benefits.6
Example: Matt has not received any permanent disability checks for six weeks. He should have been paid $290 a week but the insurance company made a mistake in their computer system and no checks went out. Matt should get the six weeks of payments totaling $1,740 and a penalty payment of $174 (or 10% of $290 multiplied by 6).
5. Are there disputes regarding permanent disability benefits?
There can be. For example, an injured employee may believe that his/her doctor did not provide the correct impairment rating. If this is the case, the worker can request a second evaluation by a different doctor. The new physician will then issue his/her own opinion on the employee’s permanent disability status.7
Injured workers may also disagree with their permanent disability ratings. If this is the case, it is critical for a worker to consult with an experienced California workers’ compensation attorney.
The disability rating process is extremely complicated and difficult to comprehend. A skilled workers’ comp lawyer can help determine whether or not a rating is actually flawed.
If the lawyer believes the rating is flawed, the attorney should send a letter to the insurance company that communicates this belief.
If the attorney and the insurance company cannot agree on the value of permanent disability, a workers’ comp judge can hear the case and provide a ruling on the correct disability rating.
For additional help…
For additional guidance or to discuss your case with a workers’ comp lawyer, we invite you to contact our law firm at the Shouse Law Group. Our attorneys provide both free consultations and legal advice you can trust.
Our lawyers also represent clients throughout California State, including those in Los Angeles, Orange County, and San Diego.