California's New $15 Minimum Wage May Affect Workers' Compensation Benefits

The Fight for 15 is over, and California’s workers who earn a minimum wage have won. On April 4, Governor Jerry Brown signed legislation to raise the state’s mandatory minimum wage to $15 an hour. The plan is for the minimum wage to increase to $10.50 per hour on January 1, 2017, and rise each year until it reaches $15 in 2022, for businesses with 26 or more employees. Future raises will be tied to inflation.

“Economically, minimum wages may not make sense,” Brown said. But, he continued, work is “not just an economic equation,” citing social, moral and political components that also must be considered. The governor can halt the increase for a year if poor economic conditions dictate such a move.
The idea behind the rise in the minimum wage is to enable working men and women to better care for their families. But what happens when those workers are injured? How does the rise in the minimum wage impact their Workers’ Compensation benefits?

One important benefit to an injured worker who has filed a Workers’ Compensation claim is Temporary Disability (TD). This benefit is designed to compensate an injured worker while he or she is unable to work and under active medical treatment due to the on-the-job injury. TD benefits are paid at a rate of  two-thirds of your average weekly salary. So, for minimum wage earners, an increase in pay rate will increase their TD payments should they get hurt at work.

The same may hold true for those who qualify for Social Security Disability Insurance (SSDI) benefits because a higher income earned will  lead to a higher  SSDI payment since the rate is based on taxable earnings. There is, however, an annual income threshold amount, which may be impacted. Each case is different, and must be treated as such.

The Workers’ Compensation system is complicated and constantly changing. In order to receive the full range of benefits to which you are entitled, it is advisable to have an experienced, knowledgeable Workers’ Compensation and/or Social Security Disability attorney on your side.