Heyl Royster

 


Heyl Royster

 

Navigating an Amputation Rate Calculation

By: Emma Ray, Rockford Office

Losing an arm, thumb, finger, or possibly even a leg while performing work duties can lead to troubling medical expenses and lost wages, forcing employers to pay disability benefits for a specified period of time. Employers often struggle with how to calculate benefit payments when they are faced with an employee who has suffered an amputation. In such instances, an employer must determine what rate amputations are to be paid at in relation to an employee’s average weekly wage. This also leads to some discrepancy when determining the minimum or maximum payments that must be paid to compensate an employee who suffers an amputation. This article will clarify the complex issue surrounding amputation benefits and what rate an employer must pay an injured employee who has suffered an amputation to avoid being subjected to penalties and/or attorney’s fees under the Illinois Workers’ Compensation Act.

An Employee Suffers an Amputation – Where to Start

A fundamental notion in the workers’ compensation realm is that in order for an employee to claim workers’ compensation benefits, the injury must arise out of and occur during the course of employment. Lester v. Industrial Com’n, 256 Ill. App. 3d 520 (1st Dist. 1993). If no dispute exists as to whether an injury arose out of and in in the course of employment, an individual who receives amputation benefits under the Act must be immediately compensated. If an employer otherwise delays payments, he can be subject to penalties under the Act, unless the employer can show he had a reasonable belief that the delay was justified. Lester, 256 Ill. App. 3d at 524. As an example, you were not provided medical evidence which proved there was an actual amputation, or bone loss to trigger the statutory loss. You have the absolute right to demand such evidence before paying the statutory loss benefits.

Section 8(e) of the Act provides the statutory compensation for amputations by assigning certain body parts a fixed number of weeks an employee can receive PPD payments. 820 ILCS 305/8(e). The maximum number of weeks for compensation correspond with the permanent loss of use of a body part, or in the event of partial loss, a percentage of the maximum number of weeks is used. For example, if an employee suffers 70% loss of use of his thumb, and the statutory payment under section 8(e) is 76 weeks for 100% loss, an employer would take 70% of 76 weeks and thus be required to pay PPD benefits for 53.2 weeks.

In order to determine the value of a “week” of compensation, an employer must determine an employee’s average weekly wage. An employee’s average weekly wage is determined by (1) ascertaining how much money he actually earned during the 52 weeks preceding his injury, and (2) dividing that amount by 52. Section 10 of the Act gives further clarification and direction for calculating an average weekly wage rate.

How to Compensate an Amputation

Discrepancy arises because employers are unsure how to compensate for amputations, and the Illinois Workers’ Compensation Act lacks clear guidance with respect to the exact rate and limitations used for amputation rate calculations. In order to determine the correct compensation for an amputation, employers need to look under section 8(b) of the Act. Section 8(b)(2.1) states in part:

The compensation rate in all cases of serious and permanent disfigurement . . . under paragraph (e) of this Section shall be equal to 60% of the employee’s average weekly wage . . . provided that it shall not be less than 66?% of the sum of the Federal minimum wage . . . or the Illinois minimum wage under the Minimum Wage Law, whichever is more, multiplied by 40 hours.

820 ILCS 305/8(b)(2.1).

Nonetheless, the PPD rate equal to 60% of an employee’s average weekly wage is subject to the minimum and maximum rate rules under section 8(b)(4). Section 8(b)(4) provides that the weekly compensation in amputation cases under paragraph (e) of the statute is 133?% of the State’s average weekly wage. Section 8(b)(4.1) also provides that the minimum weekly compensation rate in amputation cases under paragraph (e) shall not be less than 50% of the State’s average weekly wage.

In sum, this means that an individual receiving an award under the Act for temporary total disability, death, permanent total disability, or amputation or enucleation of an eye under section 8(e), is entitled to a compensation rate of 60% of his average weekly wage up to the maximum of 133?% of the State’s average weekly wage. But, the minimum compensation rate must not be less than 50% of the State’s average weekly wage, as stated under section 8(b)(4.1). These minimum and maximum rules provided in the Act are in place so an injured employee is unable to receive PPD benefits greater than his average weekly wage.

Despite the statutory language, some practitioners are still confused on whether amputation benefits are to be paid at a rate of 60% of an employee’s average weekly wage, or at the 66?% rate. Modern Drop Forge Corp. v. Industrial Commission, 284 Ill. App. 3d 259 (1st Dist. 1996) is an instructive case on this issue. In Modern Drop Forge Corp., the arbitrator awarded benefits using the 60% rate after petitioner suffered an amputation of his right hand. The commissioner then awarded the petitioner permanent disability payments at a rate of 66?% of his average weekly wage. The circuit court affirmed the commissioner’s decision stating that the “maximum rate available to the petitioner is 66?% of his average weekly wage. The appellate court ultimately reversed the commissioner’s decision and determined that the proper compensation rate for amputations is 60% of the employee’s average weekly wage.

The statutory language provided in the Act, alongside the commissioner’s decision in Modern Drop Forge Corp., makes it relatively clear that amputations are to be compensated at 60% of an employee’s average weekly wage, subject to the minimum and maximum rates discussed above.

What about TTD payments?

Employers may also start to question whether they need to provide statutory amputation payments under section 8(e) of the Act during the same period for which TTD benefits are being paid. This question was addressed in Greene Welding and Hardware v. Illinois Workers’ Compensation Commission, 396 Ill. App. 3d 754 (4th Dist. 2009). In Greene Welding and Hardware, an employee received TTD benefits during the period he performed light work duties after he suffered 100% loss of use of his right ring finger and 50% loss of use of his right middle finger. Once the employee returned to full work duty, which was also the date he reached “maximum medical improvement,” he received 12 weeks of PPD payments. The employee brought a claim against his employer for the delay in statutory amputation benefit payments. The commissioner determined that undisputed statutory amputation benefits under section 8(e) of the Act accrue from the date of the accident and should be paid as soon as the amputation and average weekly wage are determined. The commissioner’s decision was affirmed on appeal and the employer was ultimately subjected to penalties for the delay in statutory amputation payments.

The critical takeaway from Greene Welding and Hardware is that amputation benefits must be paid to an injured employee once an employer is made aware that there is an amputation loss and the employee was injured in the course of employment, despite the fact that TTD benefits are still being paid. If an employer otherwise delays payment, he can be subject to penalties under the Act, pursuant to sections 19(k), 19(l) and section 16. 820 ILCS 305/19.

Key Takeaways

Although the complexity of the amputation rate issue can pose a headache, employers who are faced with an amputation claim by an employee should focus on the following four takeaways:

  1. Statutory amputation payments under section 8(e) of the Act shall be immediately paid as soon as the employer is made aware of the amputation and the employee’s average weekly wage is determined.
  2. The PPD rate for amputations is 60% of the employee’s average weekly wage, not 66?% of the average weekly wage.
  3. The minimum amputation rate that must be paid to an employee is 50% of the State’s average weekly wage, and the maximum rate is 133?% of the State’s average weekly wage. This is the rate in effect at the time of injury.
  4. PPD benefits under section 8(e) of the Act do not toll during periods for which TTD benefits are being paid.

For a clear guide specifying the exact minimum and maximum rates corresponding to the date of injury, please refer to the Illinois Workers’ Compensation Rate Guide prepared by attorneys at Heyl Royster, or refer to the benefits rate chart on the Illinois Workers’ Compensation Commission website.