People that can’t work because of their industrial work injury or occupational disease in Washington State can receive time-loss compensation benefits. Single people with no dependents sometime struggle because the time-loss compensation rate is 60% of what they were making at the time of the work injury. However, keep in mind that you don’t pay taxes on time-loss compensation benefits under a workers’ compensation claim. In other words, when calculating your taxable income, L&I claim payments aren’t taxable. The purpose of this article to explain similar benefits such as kept-on-salary.
L&I claim and time-loss compensation benefits
Time-loss compensation benefits are vital for work injury claimants. At the same time, many employers are very frustrated by this benefit. They are frustrated because L&I rates go up when their employees receive time-loss checks. Businesses often argue that it’s unfair. In response, L&I created several incentive programs to help employers keep their rates down.
I don’t have a problem with the Department of Labor and Industries (L&I) working to keep employer L&I rates down. However, I am incredibly critical of L&I’s application of their incentive programs. From my standpoint, I strongly believe that L&I gives employer-incentives way too easily without appropriate oversight or enforcement. As a result, workplace injury victims are being punished while employers are rewarded for unfair use of incentives.
The L&I Kept-on-Salary incentive program for employers
One incentive that works well for employers (and not so well for people with a workers’ compensation claim, especially with self-insured employer) is called Kept-on-Salary (KOS). Like its name, the idea is that a person that suffers work injury continues to receive regular paychecks, even when they can’t work. If you search online, you can find several articles about KOS that help employers reduce their L&I rates and save money. However, there isn’t any information on the L&I website for the Kept-on-Salary program.
Despite having no information for work injury claimants, the Kept-on-Salary plan is available. In fact, it’s governed by RCW 51.32.090 and RCW 49.46.210. Under these rules and regulations, if a work injury claimant is under the Kept-on-Salary program, then they are not getting time-loss compensation payments.
How does Kept on Salary work in L&I claims in Washington State?
In short, if a work injury claimant is on kept on salary, it means that the employer continues to pay the worker. However, the employer must meet several conditions:
- The injured worker shall receive a total of all wages (i.e., form all employers and jobs) as of the date of their work injury. This includes absolutely all payments that the work injury claimant was getting before. Even after-hours or jobs outside the scope of his or her work hours with the employer of injury.
- The wages must include the benefits that the worker had prior to the work injury. Specifically, payments include healthcare benefits, housing (when applicable), fuel expenses and reimbursement, and so on. On top, it must include tips, shift-change or overtime pay, bonuses, and all other expense and benefits.
- The employer can deduct certain amounts to comply with state or federal law. However, the employer cannot make any other deductions.
- The employer must pay wages on a regular schedule at least once a month.
Employers misusing the Kept-on-Salary incentive
Employers can’t mandate workers to use benefits they earned over time such as vacation, sick leave or paid time off, to keep from paying time-loss compensation. Therefore, if an employer is making you take time off or vacation and doesn’t pay for that time, then you’re not under the Kept-on-Salary plan. This is one aspect of the program that employers can abuse. After all, L&I relies on employers to report if the L&I claim worker is on KOS.
Practically speaking, the problem is the shocking lack of remedy for people with a workers’ compensation claim. Employers can easily abuse this benefit because there are no real penalties or oversight. More explicitly, L&I does not seem to actively check the facts or the reliability and consistency of employer reports.
The reality of the Kept-on-Salary program
In my experience, employers are often not adhering to KOS requirements. I cannot tell you how many times I’ve had to collect evidence to prove the employer is not meeting the requirements. The process tends to be long, drawn out, and incredibly stressful for people trying to move their L&I claim.
In conclusion, incentives to help employers to reduce L&I rates make some sense. However, L&I needs to do a much better job to ensure that those incentives do not have a punitive impact on people that suffer a work injury.
i have just received a bill of unpaid bills from physical therapy from 2 years ago .I was on L & I and now I am responsible for half the bill . I am now retired and at this point I was under the understanding everything was taken care of by Company and L & I . can you give me some options here I am a retired Teamster .
I’m so sorry to hear you are in this situation. There is some additional information we would need to know in order to help you navigate this situation to get the bills paid. If you have a moment, please call our office so that we can discuss this further.
Thanks!
I have a question can someone that was injured but then fired from the job still be put on kept on salary even tho that person doesn’t work for them anymore
If employees are injured at work and employer chooses to let L&I pay lost wages but at the same time allowed 40 hrs of my pto time to be paid to me than months later they said they were cutting me a check for past lost wages including giving me 40 hrs of pto back and that I can pay back L&I what they already paid me, this makes no sense. is this even ok?
Hi Debbie. I’m not sure I fully understand the question. Please feel free to call our office to discuss your question.
I was injured on the job began collecting time loss through L&I. then 3 months later found out that employer had been paying me time loss through direct deposit without my knowing When I saw this I asked employer why they were paying me still and they said they were required to. so am I liable for any money I received unknowingly ?
Hi Tony. There are certain cases where if there have been over payments, then you would have to pay some moneys back. Obviously you would have to look into the details of exactly what happened, the amounts paid, and so on. It’s difficult to dive into the appropriate level of details here. If you want help, please call our office.
Is time loss taxable if you live in California and was injured in Washington state?
Good questions. If you live in Washington State, then it’s not taxable at the state level and the federal level. I am not familiar with the tax code in your state. While I don’t expect time-loss to be taxable there, you should consult with a local tax person.
hello, im.on kept on salary after a work injury ( LnI claim ) If I hired an attorney can they take % from mi KOS paycheck??
No, in my opinion.
Hi there, i incurred an injury at work that required surgery n rehab it has been 3 months since the surgery even though healing will take at least 6 months, I have been receiving time loss benefits but now L and I is pushing to have my Dr release me on a part time basis even though his evaluation is that I am not able to do so. My healing is progressing but still unable to drive or sit or stand for long periods, so my question is if I go back to work on a part time basis, will I still receive time loss for the difference from L and I?
Hi Luis. If you are back to work at lower earning capacity then you should receive a benefit called Loss of Earning Power. More information about it is available here: https://recklaw.com/lni-claim/loss-of-earning-power/
Question: if you dispute a decision on a claim and ask for reconsideration from L&I and are kept on salary can they stop your compensation payment with out written notice?
Can you explain what you mean? If you are kept on salary you don’t get L&I compensation. I don’t understand the question.
I have a Member that has been (KOS) and the company refuses to pay his Pension Benefits as part of his package. Is the company obligated to pay this benefit?
Hi Carl. I’m not understanding the question. If this is part of an ongoing claim, please call our office.
I’m a Supervisor at a hospital and I have a question , If one of my employees had 191 vacation hours but she was out on L & I leave for 2 months does the hospital eventually recover and restore her 191 hours back to her paycheck, It’s to my understanding that’s the way it’s supposed to be . Help me with clarity please because like I explained to my employee I have no idea how L & I works.
hi nobody responded to my question. is it possible to be put on kept on salary after being fire. the thing is I was working for a company and I was injured never told my rights so I filed a claim with l&I I was going to my doctor appts but then I was fired so I thought I couldn’t get Medical care until a few months later I receive a letter from l&I saying I could still receive medical care so I did and then I was informed I could receive works comp. so right when l&I was gonna pay me time lose the company that fired me stepped in and wanted to do kept on salary even tho they had fired me
Sorry for the delayed reply. In short – if you were my client, then I would fight L&I about it. However, your employer can do Kept On Salary even though they fired you.
I was injured on the job 3 weeks ago, and my L&I claim has not been decided. Can I use PTO for these 3 weeks in order to pay my bills? What happens if my claim is approved, and I receive an L&I benefit check for those 3 weeks?
Hi, my name is Christopher Perez and I have a question. I wanted to know if I could put my L&I knee surgery on hold because of financial problems and hardship/? I’m willing to go back to work for a year. My keen to killing me, but I need to get my hardship and finances in order in order to be out for the surgery. So is there a way to put the surgery on hold?
Hi Christopher. Please call our office to schedule a free consultation where we’ll go over your options.
I have a lawyer due to my.work injury but I await spine surgery from March 2022 injury , and as of may 11, 23, it has been approved , for surgery, question Sept 28 22 was last day worked as Dr pulled me out and filed LNI. no regular payments and was forced to use PTO 2 weeks later of work pulled, I have gotten random time loss due to layers requests, and now approved claim, I am being told now the employer is to pay KOS, at my pre work injury rate till July 23. I am Abita skeptical of how this is to work as I will have neck surgery with 3 disc fusion an 6 to 13 month recovery and which my back will then have its approved surgery. that being 2 yrs down the road. I’m now 64 at the time of injury 63, and legal retirement age 66 and 10 months. is this KOS worth it? I don’t have a say it seems. and I’m in washington state. how should this proceed? consult my lawyer ?
Hi Joseph. Yes, please consult with your attorney.
Does a KOS Employee have to be paid Pension Contributions?
Hi Carl. The statue does not specifically identify Pension Contributions as part of KOS benefits, but since the law is that you should continue receiving the benefits that you had prior to injury, one can reasonably argue Pension Contributions should continue. I hope this helps.
will a medical leave of absence stop kos benifit
This is a very difficult question to answer without having additional information. In general, if a medical provider certifies you are unable to work (temporarily totally disabled) as a result of an industrial injury/occupational disease, your employer can keep you on salary (KOS) while you’re temporarily totally disabled. If your employer does not elect KOS then you would be entitled to time-loss compensation. If you are self electing a medical leave of absence, that is a completely different issue and you should probably consult with an experienced workers compensation attorney to better understand your situation and your options.
If you are injured and kept on salary at 40 hrs a week but have not been employed with the company long enough to earn paid holidays should your pay for a week that a holiday falls in be 32 hrs rather then your 40 hr salary? doesnt seem to make much sense if you are injured rather then taking a holiday off? thanks for any input.
Hi Travis. I think it would be best to ask someone at the HR department with your employer. Sorry I can’t be more helpful.
I am KOS but the employer took the date on injury 7/29/21and counted average hours from 7/2020 -7/2021. When my employer first said they would keep me on salary they said they would pay me 30 hours a week and then 18 months later used the hours from 7/2020-7/2021 which I feel is not a fair assessment due to the pandemic. It is well over the 60 day protest period because they never sent me notice of those hours and I had been working 32 hours a week. I accepted the 30 hours a week because I thought it was fair due to the ebb and flow of construction. Can I do aythinng about it now?
So, my employer is keeping me on salary but I got sick with walking pneumonia and have missed almost a month of work due to my illness. My employer is saying that now I have to take PFML which I don’t agree with doing because of not being sure if my walking pneumonia has to do with my broken ribs injury. Is it right for them to do that?
This question is very difficult to answer in writing because it is highly circumstantial and variable. If you’d like to have a quick conversation so we can explain the variables, please give our office a call.