04 Apr Workers’ Compensation Settlement Formula
If you were injured on the job, typically you are entitled to a lump-sum settlement based on permanent partial disability (PPD) if you still have residual impairment. The Workers’ Compensation settlement formula for PPD is a three-part formula based on the following:
- Permanent Partial Disability rate, which is an average of the last 13 weeks of employment prior to your injury, multiplied by 2/3; MULTIPLIED BY
- The number of weeks of compensation for the injured body part, based on the Permanent Partial Disability chart; MULTIPLIED BY
- Impairment rating, which is the level of impairment based on treatment received and level of complaints when released at maximum medical improvement (MMI). If you had no difficulties, this number would be lower. A 0% means nothing is wrong with you – this would be the equivalent of a paper cut that heals. Usually surgical cases are in the 20+ range. A soft tissue injury is usually in the 2.5-7.5% range.
The Workers’ Compensation settlement formula is: PPD rate X number of weeks of compensation X impairment rating. There is no pain and suffering in workers’ compensation cases, it is based solely on the PPD formula.
Typically the PPD rate and the number of weeks of compensation are set early in a case and not disputed. The impairment rating is usually the point of contention. The employer, through the insurance company or the defense attorney, typically wants the impairment rating number to be low while the employee wants the number to be high.
Consult Rana Law Group, LLC if you have any questions regarding a workers’ compensation case.
Tarun B. Rana, Esq.
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