By: Patrick A. Johnson
Please recognize that the excitement from this event can be overwhelming. Still, we all need to calm down and take notice that these new maximum and minimum compensation rates are going into effect on September 1, 2024. If you are not already aware, on September 1 of each year, the Office of Workers’ Compensation promulgates a new set of maximum and minimum rates. Attached to this email you will find the updated rates.
Starting on September 1, if after you run your compensation rate calculation, the compensation rate is greater than the maximum comp rate – which will be $845.00 starting on September 1, 2024 – then you use the maximum compensation rate regardless of what your two-thirds of the Average Weekly Wage (AWW) calculation provides. For example, two-thirds of an AWW of $2,975.12 is $1,983.41. As that number is greater than the $845.00 maximum compensation rate, the compensation benefits are paid using the maximum compensation rate amount. This also applies to Supplemental Earnings Benefits (SEBs) despite what you may occasionally be told by opposing counsel. However, the calculations are somewhat different. Since SEBs are calculated monthly, you must calculate the maximum compensation rate as a monthly value. Taking the $845.00 maximum compensation rate, multiplied by fifty-two weeks before dividing by twelve months gives you a maximum monthly SEB rate of $3,661.67. After you run your SEB calculations each month – starting on September 1, 2024 – if the SEB calculations provide a number greater than $3,661.67, you only owe the equivalent of the maximum compensation rate expressed monthly. Always note this maximum monthly compensation rate in your claim notes to prevent you from having to run that calculation again the following month.
Unfortunately, how we handle the minimum compensation rate is even more confusing. Starting on September 1, 2024, the minimum compensation rate will be $225.00. If your compensation rate calculations provide a number less than the minimum compensation rate based on an AWW above the minimum, then you pay the minimum compensation rate. However, if the actual AWW is less than $225.00 a week, you pay the claimant their actual wages.
Finally, Louisiana does not have a cost-of-living increase, and the compensation rate in effect at the time of the accident, including the maximum/minimum rates, applies throughout the life of the claim. Stated another way, you do not adjust the compensation rate each year in an active claim
We always recommend as a best practice that you create an annual notice/pop-up on whatever calendar program you use that on September 1 of each year, there will be new compensation rates. As this information is published by the Office of Workers’ Compensation, if you use the incorrect maximum/minimum compensation rate, you will be hit for an underpayment of an indemnity penalty of up to $2,000.00. If this information is available to everyone, you will be hard-pressed to convince a court that your error was reasonable. Taking a few seconds to create this recurring calendar notice is a small price to pay to avoid having to go to your supervisor or your supervisor’s supervisor for authority to pay that penalty if awarded a trial.
