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.