Department of Labor & Industry
Employment Relations Division
Erin Austin
Workers’ Compensation Research Analyst
December 4, 2006
RETURN TO WORK
Retu
Tim rn to W
e an
d W ork
ages
ages
jury W
Workers’ Compensation
ge s
Return to Work
Pre-in
nefits
y Wa
i d Be
inj u r
& Pa
Post-
Injury Occu
rs
Purpose
The Return to Work Study Group was
formed to answer the following:
What is the economic outcome for injured workers?
Provide estimates for the wages lost by an injured worker.
What benefits are paid to an injured worker prior to maximum
medical improvement and post maximum medical
improvement?
What part of these lost wages are not replaced by benefits?
How long does it take for the injured worker to return to
work?
Identify potential drivers of lost wages and return to work
duration for future study.
Data
The 4,309 lost time claimants
injured in 2000
Demographic, Injury and Benefit
information from WCAP*
Wage information from Unemployment
Insurance*
*Adjusted for inflation to 2nd quarter 2006 wages using CPI-U
Methodology Used to Estimate Lost Wages
Established time series methodology which
uses properties of an injured worker’s
wage history to forecast the wages the
worker would have earned had they not
been injured
Property One: Wages in consecutive quarters are
strongly associated
Property Two: Wages exhibit long term trends
Montana economic trends are used to fine
tune estimates (Annual Quarterly Wage)
Results based on medians instead of
averages to offset the effects of extreme
values due to reporting errors
Data Limitations
Accuracy of the estimates limited by
missing or misreported information
provided to DLI (Variables used are
approximately 90% complete)
UI wage information is quarterly
Uncertainty regarding quarterly
wages of zero in the UI data base
(7.82% of population)
Small number of quarters available
to predict future wages
Example
Injured Worker Wage History
9000
8000
7000
6000 Est. Lost Wages
Est. Wages w/out Injury
W ag es
5000
Benefits + Actual Wages
4000 Benefits
Actual Earned Wages
3000
2000 RTW
Wages
1000
0 Injury Benefits
1996 2006
End
Quarters
Return to Work
(RTW) Wages
Weekly Median Wages (Dollars)
1st Quarter 2nd Quarter 1st Year 10th Quarter
Pre-Injury of RTW of RTW of RTW of RTW
Wage $391.95 $298.54 $323.65 $299.56 $249.07
Change from
pre-injury -$48.92 -$25.59 -$38.5 -$101.11
Percent Change -14.52% -6.69% -10.84% -30.8%*
*The percent of injured workers with a quarterly reported income
of 0$ increased from 38% to 46% from 2002 to 2006
Categorizing
Return to Work Wages
Higher Wage Earners:
Injured workers where 2/3 of their pre-
injury wage exceeds the maximum benefit
amount ($637.50 before 7/1/2000 and
$658.50 after 7/1/2000)
Lower Wage Earners:
Injured workers where 2/3 of their pre-
injury wage does not exceed the maximum
benefit amount
RTW by earner type
Lower Wage Earners (81% of total population)
Median Dollar Amounts
Pre-injury 1st Quarter of 2nd Quarter 1st Year of 10th Quarter
Wage RTW of RTW RTW Of RTW
Wage $339.28 $261.23 $283.93 $261.13 $208.71
Change from pre-injury -$40.07 -$18.91 -$32.26 -$87.75
Percent Change -13.36% -5.71% -11.12% -31.02%
Higher Wage Earners (19% of total population)
Median Dollar Amounts
Pre-injury 1st Quarter 2nd Quarter 1st Year 10th Quarter
Wage of RTW of RTW of RW of RTW
Wage $810.10 $676.29 $699.44 $700.40 $600.68
Change from pre-injury -$149.02 -$94.66 -$94.67 -$264.13
Percent Change -17.96% -11.23% -9.89% -28.86%
Example (cont.)
Injured Worker Wage History
9000
8000
7000
6000
Est. Wages w/out Injury
W ag es
5000
Benefits + Actual Wages
4000 Benefits
Actual Earned Wages
3000
RTW
2000 Wages
1000
0 Injury Benefits
1996 2006
End
Quarters
Median dollar amounts of TTD benefits
$2,010 $2,005
Temporary
$2,000 Total Disability
(TTD Benefits):
$1,990 A physical
condition
$1,980 Total resulting from an
$1,974
Bi-Weekly injury, that
$1,970 $1,964 results in total
Lump loss of wages.
$1,960
$1,950
$1,940
TTD
Received by 86.7% of injured workers
Median dollar amounts of TPD benefits
Temporary Partial
Disability (TPD
Benefits):
$1,000 $919 $919
A physical condition
$900 resulting from an
$800 injury in which a
worker, prior to
$700 maximum healing;
$600 is temporarily unable
$500 Total to return to the
position held at the
$400 Bi-Weekly time of injury
$300 because of a
medically
$200
determined physical
$100 restriction; but
$0 returns to work in a
TPD modified or
alternative
Received by 15.5% of injured workers employment; and
suffers a partial
wage loss.
Median dollar amounts of PPD benefits
Permanent Partial
Disability (PPD
Benefits):
$9,000 $8,573
A physical condition
$8,000 in which a worker,
after reaching
$7,000 maximum medical
$6,000 healing; has a
permanent
$5,000 $4,515 Total impairment
$4,000 Bi-Weekly established by
Lump objective medical
$3,000 $3,341 findings; is able to
$2,000 return to work in
some capacity but
$1,000 the permanent
$0 impairment impairs
PPD the worker's ability
to work; and has an
Received by 36.5% of injured workers actual wage loss as
a result of the injury.
Median dollar amounts of PTD benefits
Permanent Total
$78,400 Disability (PTD
$80,000 Benefits):
$70,000 A physical
condition resulting
$60,000
from injury after a
$50,000 worker reaches
$41,287
Total maximum medical
$40,000 healing, in which a
Bi-Weekly
worker does not
$30,000 Lump have a reasonable
$20,000 $27,745 prospect of
physically
$10,000 performing regular
employment.
$0
PTD
Received by 1.1% of injured workers
Median dollar amounts
of Indemnity benefits
$2,980
$2,962
$2,960
$2,940
$2,920
Compensation
$2,900
Vocational
$2,880 Rehabilitation
$2,859 $2,859
$2,860 Total
$2,840
$2,820
$2,800
Benefit Type
Sample Sizes: Compensation = 4219, Voc. Rehab=235, Total=4222
Summary Tables
Summary tables
are included
in your handouts
Example (cont.)
Injured Worker Wage History
9000
8000
7000
Est. Lost Wages
6000
Est. Wages w/out Injury
W ag es
5000
Benefits + Actual Wages
Benefits
4000
Actual Earned Wages
3000
2000 RTW
Wages
1000
0
1996 Injury Benefits 2006
Quarters End
Summary of wage loss information
Median wage loss without WC
benefits*
$63,223
Median wage loss with WC
benefits*
$54,699
*After tax adjustment using information from
the Bureau of Economic Analysis (BEA)
Summary of wage loss information
Median replacement rate of the
estimated wages by actual earnings
and WC benefits
59.5%
This implies that an injured worker will lose
40.5% of the wages (after WC benefits have
been included) they would have earned if they
hadn’t been injured
Breakdown of wage loss by earning type
Higher wage earners have a net loss of
$112,446. The replacement percentage is
58.7%.
Lower wage earners have a net loss of
$46,925. The replacement percentage is
59.9%.
Breakdown of wage loss relative to date of Maximum
Medical Improvement (MMI)
The maximum medical improvement date is the date a physician
has determined that the worker has reached maximum healing.
The physician has determined that the worker will not further
recover from his or her injury.
Lost Earning
Injury Date Healing MMI Date Capacity 6/30/2006
Permanent Total Disability benefits are not included in
this analysis to isolate injured workers able to return to work
Median Replacement Amounts
All Wage Earners (Subpopulation size 1316)
Replacement rate while healing is 51.1%
Replacement rate after healing is 45.9%
Lower Wage Earners (81% of subpopulation)
Replacement rate while healing is 48.5%
Replacement rate after healing is 44.4%
Higher Wage Earners (19% of subpopulation)
Replacement rate while healing is 56%
Replacement rate after healing is 54.1%
Return to Work Times
All Wage Earners (Subpopulation size 2487)
The median time from injury until returning
to work is 11.4 weeks (80 days)
Lower Wage Earners (82% of subpopulation)
The median time from injury until returning
to work is 10.6 weeks (74 days)
Higher Wage Earners (18% of subpopulation)
The median time from injury until returning
to work is 14.1 weeks (98.5 days)
Summary
Overall, an injured worker loses 40.5%
of their wages with a more significant part of
the wages lost after maximum healing
Overall, an injured worker will return to work
after 11.4 weeks
Preliminary results indicate pre-injury wages
are not a significant factor in the percentage
of lost wages, but are a potential factor in the
return to work duration
Future topics
for this study
Employer
Injuries
Industry
Geographic location
Impact of demographic variables
Continuing to improve estimate
methodology
QUESTIONS
This presentation along with other workers’ compensation
study information is located on our project website:
http://erd.dli.mt.gov/wcstudyproject/wcstudyproject.asp
Contact Information:
Erin Austin
(406) 444-0982
EAustin@mt.gov