California: Dept. of Labor Posts SAWW Information for 2014 COLA Calculations

California: Dept. of Labor Posts SAWW Information for 2014 COLA Calculations

The US Department of Labor has issued its 1st Quarter Unemployment statistics for the State Average Weekly Wages (SAWW) used for calculating statutory increases in Minimum and Maximum TD benefits under Labor Code §4453(a)(10) and also Life Pension Cost of Living Adjustments (COLA) pursuant to Labor Code § 4659. The SAWW increased for the relevant period (1st Quarter of 2013) to $1,067.25, an increase of $7.87 from last year’s figure $1059.38.  The increase in the SAWW results in a 0.742% (approximately 3/4 of a percent) increase in the minimum and maximum benefit rates as well as life pension COLA rates. Minimum and Maximum rates for 2013 were $1,066.72 and $160.00 respectively.

Based on the new SAWW figure the Minimum & Maximum TTD rates effective 1/1/14 should be as follows:

                     Earnings    TTD Rate

Minimum      $241.78       $161.19

Maximum     $1611.96     $1,074.64

For purposes of Labor Code § 4659, pursuant to the California Supreme Court Decision in Baker v W.C.A.B., COLA increases on life pension awards do not begin until the benefits become due. For Permanent Total Disability awards, the increases begin with the P & S date (or possibly the commencement of the PTD benefit if begun prior to P & S date, an issue the Supreme Court declined to decide in its decision). For life pension cases based on awards of partial permanent disability between 70% and 99%, the COLA increases do not begin until the January 1 following commencement of the life pension benefit. COLA increases under Labor Code § 4659 apply only to injuries occurring on or after 1/1/2003. Increases do not apply to cases with injuries prior to that date.

It is important to remember for those employees who are being paid at either the minimum or maximum rate on 1/1/14, where the injury is more than 2 years old (prior to 1/1/12) the employee is entitled to an increase in TTD up to the new maximum rate (depending on the employee’s earnings) pursuant to Labor Code § 4661.5. Such increases must be based on sufficient earnings to justify an increase.

For life pension cases however, the COLA applies regardless of the actual earnings. The increase calculated for 2014 is one the smallest in our experience since Labor Code AB 749 implemented COLA increases based on the SAWW.

The calculations for the new state minimum and maximum TTD rates come courtesy of Bob Young from CWCI who issued their memorandum on this issue this week.

The DOL website for confirmation of this information is located at: https://ows.doleta.gov/unemploy/content/data_stats/datasum13/DataSum_2013_1.pdf

© Copyright 2013 Richard M. Jacobsmeyer. All rights reserved. Reprinted with permission.
Shaw Jacobsmeyer Crain Claffey LLP
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