Tricks of the Trade When Calculating Temporary Disability Rate

California workers’ compensation offers applicants temporary disability (TD) payment. Though the typical rate of TD pay is generally two-thirds of an applicant’s Average Weekly Earnings (AWE), recent Noteworthy Panel Decisions (NPDs) have addressed how to calculate the TD rate of pay in unique cases. 

Labor Code § 4453(c) provides four methods for calculating an applicant’s appropriate TD rate. 

  1. Labor Code § 4453(c)(1) can be applied to applicants who work 30 or more hours over five or more days per week. Under this code, average weekly earnings are calculated by multiplying the number of days worked per week by the income made per day at the time of injury. Most cases follow this common and easily calculated formula, but some have unusual circumstances that require further consideration. 
  2. Labor Code § 4453(c)(2) applies to applicants who worked for two or more employers when they were injured. AWE under this code are calculated by adding up income made from each job in the span one week—however, income from jobs other than the one where the injury occurred cannot be “taken at a higher rate than the hourly rate paid at the time of the injury.”
  3. Labor Code § 4453(c)(3) applies to applicants who have sporadic work, and earn income at an “irregular rate.” Under this code, AWE are calculated by averaging the applicant’s weekly earnings over the span of one year. 
  4. Labor Code § 4453(c)(4) applies to applicants who work less than 30 hours per week, or who have unique circumstances that prevent application of one of the previous methods. Under this code, AWE are equivalent to the sum that most accurately represents the applicant’s weekly earning capacity at the time of injury.

In calculating TD rates, counsel must be aware of the intricacies of these four code sections, and the fact that minimum and maximum TD rates change every year. It’s important for litigators to be prepared to argue how and why one of the aforementioned methods should be used to determine an applicant’s TD rate. Any questions should be directed to your SRTK point person, as we are well-versed and experienced in defending our client’s interests for the most favorable determination of TD entitlement and rates.