The California Division of Workers’ Compensation announced that the 2021 minimum and maximum temporary total disability rates will increase on Jan. 1, 2021.
The minimum TTD rate will increase from $194.91 to $203.44 and the maximum TTD rate will increase from $1,299.43 to $1,356.31 per week.
Labor Code Section 4453(a) (10) requires the maximum and minimum weekly earnings upon which TTD is based be increased by an amount equal to percentage increase in the State Average Weekly Wage compared with the prior year. The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury.
In the 12 months ending March 31, 2020, the SAWW increased from $1,325 to $1,383—an increase of 4.3%.
The calculation of the 2021 SAWW increase is:
(2021 SAWW – 2020 SAWW)/2020 SAWW
$1,383-$1,325 = 58/1325 = 4.3774%
The calculation of 2021 minimum TTD rate for 2021 is:
Minimum earnings for 2020 x SAWW increase x 2/3 = minimum TTD rate for 2021
292.36 x 1.043774 = $305.16 minimum TTD earnings x 2/3 =$203.44 minimum rate for 2021
The calculation of maximum TTD rate for 2021 is:
Maximum earnings for 2020 x SAWW increase x 2/3 = maximum TTD rate for 2021
1949.15 x 1.043774 = $2,034.47 maximum TTD earnings x 2/3 = $1356.31 maximum rate
Workers with a date of injury on or after Jan. 1, 2003 who receive life pension or permanent total disability benefits are also entitled to have their weekly LP or PTD rate adjusted based on the SAWW.
This article was first published by Insurance Journal.