ISSUE: Annual Increase

The U.S. Department of Labor has announced the new National Average Weekly Wage (NAWW) effective October 1, 2012, and consequently the new maximum and minimum rates for weekly benefits derived from the NAWW under Section 910(f) of the Longshore and Harbor Workers’ Compensation Act.

The new NAWW effective October 1, 2012, is $662.59.  This represents a 2.31% increase over October 1, 2011.  All beneficiaries receiving permanent total disability or related death benefits as of September 30, 2012, will receive a 2.31% increase in their weekly rate.

The new NAWW provides the new maximum and minimum weekly rates.  Effective October 1, 2012, the maximum weekly rate under the Longshore Act is 200% of the NAWW, so the new maximum rate is $1,325.18.  The minimum weekly rate is 50% of the NAWW, so the new minimum rate is $331.30.

A Note on weekly benefits:  The weekly rate for permanent total disability and temporary total disability and for permanent partial disability based on the schedule in Section 908(c) is two thirds of the Average Weekly Wage (AWW).  The weekly rate for permanent partial disability based on a loss of wage earning capacity is two thirds of the difference between the AWW and the post injury wage earning capacity.  The weekly rate for a widow is fifty percent of the AWW.  The AWW is established as of the date of the injury.

Another Note on the new NAWW and maximum rate and the timing of their application under Section 906(c):

Section 906(c):  Applicability of determinations.  Determinations under subsection (b)(3) (new NAWW) with respect to a period shall apply to employees or survivors currently receiving compensation for permanent total disability or death benefits during such period as well as those newly awarded compensation during such period.

Earlier this year the U.S. Supreme Court decided the case of Roberts v. Sea-Land Services, Inc., et al., interpreting the language in Section 6(c).  The issue in the case was, “What maximum weekly rate applies to compensation for disability under the Longshore and Harbor Workers’ Compensation Act?”  Is it the maximum in effect as of the date of first entitlement to permanent total disability, or is it the higher, later maximum rate as of the date of the Administrative Law Judge’s Compensation Order?

The weekly rate is capped at 200% of the applicable NAWW.  Since there is a new NAWW each October 1, weekly benefits are increased each October 1 for employees or survivors “currently receiving” compensation for permanent total disability (PTD) or related death benefits during such period as of September 30, as well as those “newly awarded compensation” during such period based on the change in the NAWW.

The Roberts decision, and this issue, has been discussed here previously on December 21, 2011, January 11, 2012, and March 22, 2012.  The then current NAWW and maximum rate is effective when an employee is “newly awarded compensation”, which is when he first becomes disabled and thereby becomes statutorily entitled to benefits, no matter whether, or when, a compensation order issues on his behalf.

So, once again, the new NAWW and weekly maximum rate effective October 1, 2012, applies to those receiving benefits for permanent total disability or related death on September 30, 2012, as well as those who first become entitled to permanent total disability or related death benefits between October 1, 2012, and September 30, 2013.

One more thing:  The weekly rates for temporary total disability and permanent partial disability are subject to the maximum rate on the date of injury.  These benefits are not increased annually.  

 

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