Workers’ compensation benefits in Alabama are calculated based upon a workers’ average wage and his level of disability. Yet, regardless of your wage, Alabama law caps benefits for a permanent partial disability at $220 per week. Consider for a moment the impact of this limitation. For example, a worker earning $40,000 a year has a gross weekly income of almost $770 per week. If that worker was injured in a plant explosion and suffered a 99% disability, they would get only $220 a week maximum. In the case of our plant explosion injury, this is less than a third of that worker’s weekly earnings before suffering a devastating injury that made it difficult to find any work in the future. What’s worse, the benefits for a partial disability (anything less than 100% disability) are payable only for a maximum of 300 weeks. In reality, these small benefits will end long before the impact of such a disabling injury.
When I tell injured clients who have spent their lives working hard jobs and long hours to support their families that benefits are subject to these limitations, they often react in shock and disbelief. Frankly, I still find it difficult to believe this is how we treat our workers and their families.
When did the Alabama Legislature place this $220 cap on benefits for a partial disability? In 1985! While the cost of providing for a family has risen greatly in the last 25 years, the level of support for those having severe disabilities has not changed at all.
For example, the minimum wage in 1985 was $3.35 per hour. Now, it is 7.25 per hour. Yet, the $220 cap has remained unchanged. In 1985, the Federal poverty level for a family of four was $10,903. At the cap of $220 per week an injured worker in 1985 would receive just over $11,400 a year, enough to keep his family slightly above the poverty level. In 2011, the Federal poverty level for a family of four was $22,113. This same benefit in 2010 meant your family would only be at around 50% of the poverty level. Yet, the $220 cap has remained unchanged.
For years, the Alabama Legislature has been unresponsive to this issue which keeps Alabama families in poverty. One of our current appellate judges wrote the following during his prior years as a private practice attorney:
workers’ compensation strives to be the most humanitarian of possible damages – distribution schemes. Leaving the injured worker to the care of the public organizations or private charities may stigmatize the disabled employee. Workers’ compensation, on the other hand, provides benefits based on the employee’s contribution to society through his or her employment. A beneficiary of workers’ compensation is always someone who has participated in the economic growth of society. Thus, workers’ compensation recognizes the injured employee’s worth as a valuable part of the community.
1 T. Moore, Alabama Workers’ Compensation, Sec. 2.3 (1998).
The cost of permanent injuries will be paid by someone. Will it be paid from the insurance plans that have received premiums year after year for this coverage? Or, will it be paid by us as taxpayers? When our legislature caps an injured workers’ benefits far below the poverty level, then it is merely shifting the cost from these insurance companies to the rest of us.
Currently, Alabama State Senator Arthur Orr has introduced a bill (SB77) to increase the $220 cap to $240 a week. This remains far below the poverty level for a working family. Now, you may think that any increase helps. As the old saying goes, “the devil is in the details.” In return for this small increase, Senator Orr has also written into his proposal a tremendous cap on workers who are totally disabled. Very few workers are totally disabled from an accident. However, these are the individuals who need the protections of our system the most. In addition, his proposal also seeks to cut off medical benefits after certain time periods. So, in reality, the $20 a week increase for at most 300 weeks, comes at a heavy price. In exchange, the most injured are left in a worse position both medically and financially. That’s far too great a price for us all to bear.by Jeff Blackwell